S&P Global Cuts Paramount Credit Rating Into Junk Territory — Update
By Will Feuer
S&P Global cut its credit rating on Paramount Global to BB-plus from BBB-minus Wednesday, or what is considered junk territory, citing continuing cord cutting and elevated investments required to support the buildout of streaming services.
"Paramount will need to execute its plan to substantially improve streaming losses over the next two years to mitigate further downside ratings pressure," S&P said, adding that Paramount's credit metrics are weak even for the BB-plus rating.
Fitch earlier this month cut its rating on Paramount to BBB-minus from BBB, while Moody's last year cut its rating on Paramount's senior debt to just above junk status.
The downgrade comes days after The Wall Street Journal reported that private-equity firm Apollo Global Management made an $11 billion bid to acquire Paramount's film and TV studio, citing people familiar with the situation. The deal excludes Paramount's declining cable business.
Last month, Paramount reportedly held talks with Comcast to bring the companies' streaming apps under one roof. The deal could cut costs as the number of pay-TV subscribers decline and the ad market continues to show signs of weakness.
Apollo's offer is more than Paramount's entire market capitalization, which is about $7.7 billion.
Write to Will Feuer at Will.Feuer@wsj.com
(END) Dow Jones Newswires
March 27, 2024 16:24 ET (20:24 GMT)
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