Paramount Global's Credit Rating Under Scrutiny Amid Transition to Streaming

SOURCE www.hollywoodreporter.com
Paramount Global's credit rating is under scrutiny as the studio transitions from linear TV to streaming, leading to concerns about weaker cash flows. CEO Bob Bakish leads the pivot to streaming as S&P Global considers a possible downgrade due to increased content spending, technology investments, and marketing costs.

Key Points

  • S&P Global is monitoring Paramount Global for a possible credit rating downgrade
  • Transition to streaming leads to increased content spending and higher costs
  • CEO Bob Bakish is leading the pivot to streaming
  • Market analysts anticipate potential mergers and divestitures in the entertainment sector

Pros

  • Pivoting to streaming can capture more consumers and advertisers
  • Potential for significant divestitures and mergers in the entertainment industry

Cons

  • Weaker cash flows due to lower margins from DTC streaming businesses
  • Potential credit rating downgrade may impact debt worthiness