Paramount Global may have its credit rating cut to junk by Moody’s Ratings after the company agreed to sell itself to Skydance Media, with the bond grader citing “significant secular pressures” on Paramount businesses.
The Paramount Studios in Los Angeles, California, US on Monday, April 29, 2024. The Redstone family and independent film producer David Ellison have both offered concessions to make a possible change in control at Paramount Global more appealing to the company's other investors, according to a person familiar with the talks. --
Moody’s placed Paramount’s ratings — including its Baa3 senior unsecured notes rating — on review for downgrade, according to a statement on Tuesday. While the transaction clearly has positive credit attributes, Moody’s said it expects Paramount to face “existential pressure” to transition its content aggregation and distribution to direct-to-consumer.
“To fully mitigate the losses that will occur over time in the legacy businesses, streaming revenues will need to double their linear revenues to match the same Ebitda unless they significantly increase the ad support, a challenging feat for Paramount,” Moody’s said in the statement.
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