Fitch Ratings downgraded Paramount Skydance Corporation’s credit rating to 'BB+' from 'BBB-'. This action moves the company's debt into non-investment grade territory. The agency also placed the firm on a negative watch, indicating potential for further downgrades. This decision stems from the planned $110 billion debt-funded acquisition of Warner Bros. Discovery.
Fitch expressed concerns regarding high leverage and credit risks associated with the massive transaction. The combined corporation is expected to hold approximately $79 billion in net debt. Media industry competitive pressures and ongoing transformation costs also influenced the rating change.
The downgrade follows the formal announcement of the Paramount Skydance and Warner Bros. Discovery merger. The companies plan to integrate the Paramount+ and HBO Max streaming services into a single platform.