Sharply Declining RevenueA ~60% reported revenue decline signals erosion of scale and negotiating leverage with buyers and platforms. Sustained top-line contractions hamper ability to recover fixed production costs, reduce content investment capacity, and weaken long-term margin recovery potential absent durable revenue stabilizers.
Deteriorating Operating Cash FlowNegative operating cash flow undermines the firm’s ability to self-fund production and catalog maintenance. Over months this forces reliance on external financing or asset sales, constrains content pipelines, and increases execution risk for distribution and brand growth initiatives.
Shrinking Equity / Rising Leverage RiskA shrinking equity base raises leverage and reduces financial flexibility. Higher leverage increases refinancing and covenant risks, elevates interest sensitivity, and can limit strategic options (acquisitions, marketing, production financing) over the next several months if cash generation doesn’t improve.