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Paramount Global credit rating lowered to ‘junk status’

US reports state Paramount Global will need to execute its plan to substantially improve streaming losses over the next two years.

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Paramount Global’s credit rating has been lowered to junk status by S&P Global, US media reports.

The company said Wednesday it dropped Paramount’s rating to BB+ from BBB- due to the “accelerating declines in linear media and the shift toward a more competitive and less certain streaming model.”

S&P warned a month ago that a downgrade would be possible due to adjustments it was making to its ratings evaluation metrics.

The media company “will need to execute its plan to substantially improve streaming losses over the next two years to mitigate further downside ratings pressure,” the report added.

The news comes as speculation continues to swirl about the future of Paramount, which began 2024 as the most likely company in the media sector to be part of a major mergers and acquisitions transaction.

One positive, the S&P report noted, is its assumption that “streaming losses will improve by more than $700 million due to strong average revenue per user (ARPU) growth from price increases enacted in mid-2023 and ongoing, albeit more modest, subscriber growth.” The linear TV operation could also stabilise, the report added, given that the company will reap a windfall from political advertising this year and is part of the Super Bowl rotation as a long-term NFL rights holder.

Source: Deadline

6 Responses

  1. CBS doubled down on procedurals and selling their premium content to other broadcasters and streamers. Then they tried to switch to All Access which failed totally due to lack of worthwhile content. Then rebranded and relaunched it as Paramount+. Here they have moved all their dramas to Paramount+ and didn’t compete in Q1 showing repeats and their ratings were down 11%. Of CBS managed to convince a gullible judge that their output deal for this content was worth $600m and seize all of Ten. $600 would’ve been closer to the mark.

  2. I remember Ch9 on the brink of bankruptcy in 2012. Nothing new with media companies. I am sure it will be picked up by some global hedge fund. Paramount will survive.

    1. Paramount is small enough to be bought up by someone trying to get scale and compete against Netflix and Disney+. In which case it would cease to exist as a separate entity. You would hope that the US is smart enough not to let Disney or Netflix buy up anymore competitors.

      1. Completely agree with you. Right now the streaming giants want less competition not more, so I could see a scenario where a medium to large service buys Paramount and absorbs Paramount’s library and subscriber base.

      2. Yeah mergers have been talked about, most recently Peacock and Paramount+
        “First it was Warner Bros. Discovery eyeing Paramount Plus. Next it was Byron Allen. Now news comes that Comcast, the owner of Peacock, may be entertaining a merger with the beleaguered Paramount. The Wall Street Journal reports that Comcast and Paramount have been in recent talks about a potential streaming partnership that could see Paramount Plus and Peacock being offered to subscribers together as a package deal.”

  3. At least they’ve got all that Australian money coming in from the low rating Channel 10 shows.

    Comments tell us they’re raking in big bucks because of their demographics.

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