Paramount Global Deal With Skydance ‘May Not Be Sufficient to Stabilize the Credit Profile,’ Moody’s Says
variety.comTodd Spangler NY Digital Editor Skydance Media this week clinched a deal to merge with Paramount Global, and execs outlined a plan to cut costs and boost the combined company’s profitability in the years ahead.
But the turnaround plan might not be enough to save Paramount Global from seeing its debt rating cut to junk status by credit-rating agency Moody’s.
In a note Tuesday, Moody’s placed Paramount’s debt rating on review for a downgrade, citing “the ongoing secular pressures on the company’s television networks and the slow pivot to reach direct-to-consumer (DTC) streaming scale,” along with the announcement of Skydance-Paramount pact.
The upshot: Moody’s said it is “possible we could downgrade the ratings in the coming months, well before the pending merger closes.” As part of the pact, Skydance and its financial backer, RedBird Capital, have pledged $1.5 billion in cash to help pay down Paramount’s debt.
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