{"id":35853,"date":"2024-03-28T16:03:05","date_gmt":"2024-03-28T20:03:05","guid":{"rendered":"https:\/\/usa.businessupturn.com\/?p=35853"},"modified":"2024-03-28T16:03:05","modified_gmt":"2024-03-28T20:03:05","slug":"paramount-globals-debt-rating-cut-to-junk-status-by-sp-global","status":"publish","type":"post","link":"https:\/\/www.businessupturn.com\/usa\/paramount-globals-debt-rating-cut-to-junk-status-by-sp-global\/35853\/","title":{"rendered":"Paramount Global\u2019s Debt Rating Cut to Junk Status by SP Global"},"content":{"rendered":"
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Paramount Global, the media conglomerate behind iconic brands like Paramount Pictures and CBS, has faced a significant blow as credit-rating agency S&P Global downgraded its debt rating to junk status. The move underscores the challenges Paramount Global continues to encounter in generating free cash flow relative to its substantial debt obligations.<\/p>\n

According to S&P Global, Paramount Global\u2019s free operating cash flow-to-debt is anticipated to remain \u201cwell below\u201d 10% through 2025, while the adjusted leverage ratio is expected to exceed 3.5 times during the same period. The agency attributed the downgrade to \u201cthe ongoing deterioration of the linear television ecosystem and the elevated investments for its direct-to-consumer (DTC) streaming model.\u201d<\/p>\n

Paramount Global\u2019s long-term debt stood at a staggering $14.6 billion as of the end of 2023, raising concerns about its ability to manage its financial obligations effectively.<\/p>\n

The timing of the downgrade coincides with reports of an $11 billion bid by private-equity firm Apollo Global Management for Paramount Pictures, which represents a substantial premium over the company\u2019s current market capitalization. S&P\u2019s decision to assign junk status to Paramount Global\u2019s debt could encourage additional buyers to express interest in the company\u2019s assets, as they would not be obligated to repay or reissue the debt in the event of an acquisition.<\/p>\n

However, sources familiar with Paramount Global\u2019s leadership suggest that the company\u2019s non-executive chair, Shari Redstone, prefers to pursue a strategic merger with David Ellison\u2019s Skydance Media instead of selling off its assets individually. Such a merger would involve Skydance acquiring Redstone\u2019s National Amusements Inc. holding company, potentially paving the way for a consolidation with Paramount Global.<\/p>\n

In its assessment, S&P Global issued a \u201cstable outlook\u201d for Paramount Global, projecting a decline in leverage and improvements in free operating cash flow to debt ratio by 2024. These forecasts are contingent upon Paramount Global\u2019s ability to curtail streaming losses through measures like average revenue per user growth and subscriber expansion.<\/p>\n

Despite the downgrade, Paramount Global remains optimistic about its future prospects, emphasizing its commitment to navigating the evolving media landscape and strengthening its position in the industry.<\/p>\n

As Paramount Global grapples with the implications of its debt rating cut, industry observers are closely monitoring how the company will respond and whether it will pursue strategic initiatives to address its financial challenges effectively.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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Paramount Global, the media conglomerate behind iconic brands like Paramount Pictures and CBS, has faced a significant blow as credit-rating\u2026<\/p>\n","protected":false},"author":294,"featured_media":35854,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[71],"tags":[1096],"class_list":["post-35853","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ott","tag-paramount"],"reading_time":"2 min read","_links":{"self":[{"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/posts\/35853","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/users\/294"}],"replies":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/comments?post=35853"}],"version-history":[{"count":0,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/posts\/35853\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/media\/35854"}],"wp:attachment":[{"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/media?parent=35853"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/categories?post=35853"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/tags?post=35853"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}