DREAMWORKS - PARAMOUNT, VIACOM GET POUNDED AGAIN

PARAMOUNT, VIACOM GET POUNDED AGAIN

Michael Nathanson of Sanford C. Bernstein Media has become the latest analyst to issue a stinging appraisal of Viacom management, in this instance focusing on the operations of Paramount. Although the studio is ranked No. 2 among the Hollywood majors, Nathanson notes that much of its box-office success comes from third-party distribution deals with Marvel and DreamWorks Animation. Without them, Paramount would rank no higher than fifth, Nathanson observes. Those deals with Marvel and DreamWorks Animation, he notes, produced $168 million in operating profit, while Paramount's own movies have resulted in losses of around $80 million. He says he expects the studio to take a writedown on the Eddie Murphy debacle Imagine That , which reportedly cost $55 million to produce plus $35 million to promote and distribute but which has so far earned less than $12 million. On Monday, Analysts at Caris & Company downgraded Paramount's parent Viacom from "average" to "below average." And on Friday, analysts at Pali Research downgraded Viacom from "buy" to "neutral."

24/05/2009