LISTEN: Credit Risks: Top S&P Global Analyst Breaks Down the Paramount-Warner Bros. Discovery Deal

Variety's 'Strictly Business' podcast features conversations with media and entertainment industry leaders

By Andrew Wallenstein

Andrew Wallenstein

President and Chief Media Analyst

Latest

• LISTEN: Credit Risks: Top S&P Global Analyst Breaks Down the Paramount-Warner Bros. Discovery Deal 9 minutes ago
• LISTEN: Did OpenAI Kill What Disney’s ‘Super App’ Needs Most? 3 weeks ago
• LISTEN: How K-Pop Is Widening the Funnel for an Asian Music Boom 3 months ago

The proposed $111 billion merger between Paramount and Warner Bros. Discovery is approaching completion, but concerns around debt, execution risk, and long-term industry volatility loom large.  On the latest episode of the Variety podcast “Strictly Business,” Naveen Sarma, sector lead for U.S. media and telecom at S&P Global, explained the rationale for the downgrade his agency gave the combined company’s credit rating upon closing, though he believes the company can deliver on $6 billion in cost-cutting synergies.  “Leverage is significantly high for this transaction,” he said. “We’ve seen this story before with a lot of transactions. We do think this company has the ability to de-lever without going and making massive cuts, certainly at the studios, and so that got us comfortable with the idea that they could de-lever.”

Related Stories

How Japan IP Adaptation 'Cat's Eyes' Cracked France's Youth Audience – and What the Global Rollout Taught Its Makers