Paramount Global’s Debt Rating Downgraded to Junk by S&P
variety.comTodd Spangler NY Digital Editor Paramount Global‘s debt rating was cut to junk status by credit-rating agency S&P Global, which cited the media conglomerate’s ongoing challenges with free cash flow generation relative to its debt.
S&P on Wednesday said it expects Paramount Global’s free operating cash flow-to-debt will remain “well below” 10% through 2025, and that adjusted leverage (debt-to-equity ratio) will stay above 3.5 times through then.
The agency cited “the ongoing deterioration of the linear television ecosystem and the elevated investments for its direct-to-consumer (DTC) streaming model” for the downgrade. “Paramount will need to execute its plan to substantially improve streaming losses over the nexttwo years to mitigate further downside ratings pressure,” S&P said in its ratings adjustment.
Paramount Global’s long-term debt was $14.6 billion as of the end of 2023. The S&P downgrade comes a week after word emerged of an $11 billion bid by private-equity firm Apollo Global Management for Paramount Pictures — a price tag some $3 billion higher than the current total market cap of the parent company.
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