Paramount Global Hit With Credit Rating Downgrade Over Streaming Costs
www.imdb.com- Author: Etan Vlessing
- March 30,2023
Paramount Global has been hit with a credit rating downgrade from S&P Global Ratings over mounting content and platform investment costs to generate gains in a competitive streaming space.
The research firm reduced the Hollywood studio’s rating to ‘Bbb-’, from ‘Bbb’, on concerns over its debt load, with a stable outlook. The increased credit risk for Paramount Global comes due to a “weakening macroeconomic environment, higher peak losses in its direct-to-consumer segment and worsening trends for linear television,” S&P Global wrote on March 30.
“Even as the company has outpaced its initial subscriber growth targets for Paramount+, its operating losses have accelerated because of increased content investments, a weaker advertising market, and costs to enter new markets,” the firm wrote. “The company’s losses in its Dtc segment increased by more than 80% in 2022 to $1.8 billion and we estimate they will peak at over $2.0 billion in 2023 before improving
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The research firm reduced the Hollywood studio’s rating to ‘Bbb-’, from ‘Bbb’, on concerns over its debt load, with a stable outlook. The increased credit risk for Paramount Global comes due to a “weakening macroeconomic environment, higher peak losses in its direct-to-consumer segment and worsening trends for linear television,” S&P Global wrote on March 30.
“Even as the company has outpaced its initial subscriber growth targets for Paramount+, its operating losses have accelerated because of increased content investments, a weaker advertising market, and costs to enter new markets,” the firm wrote. “The company’s losses in its Dtc segment increased by more than 80% in 2022 to $1.8 billion and we estimate they will peak at over $2.0 billion in 2023 before improving
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