Paramount Global had its senior debt rating cut to one level above junk-bond status by Moody’s Investors Service, which cited the media company’s heavy borrowing and tough conditions for the film and TV industry.
(Bloomberg) — Paramount Global had its senior debt rating cut to one level above junk-bond status by Moody’s Investors Service, which cited the media company’s heavy borrowing and tough conditions for the film and TV industry.
The company, which owns CBS, Showtime and the Paramount+ streaming service, had its debt rating reduced to Baa3 from Baa2, according to a Moody’s statement Thursday. That’s one level above noninvestment grade, and the outlook for the company remains negative, Moody’s said.
Media companies like Paramount are struggling to adapt as consumers drop their subscriptions to cable TV in favor of streaming services. Major sources of revenue like advertising are in decline, and the companies are having to spend lavishly to attract viewers to the online services they’ve recently launched.
Paramount has about $15.6 billion in long-term debt. It has sold about $8 billion in assets, Moody’s said. Management agreed this month to sell the Simon & Schuster book division for $1.62 billion. Paramount has also cut its quarterly dividend by 79% to preserve cash.
The negative outlook reflects uncertainty over the company’s ability to reduce its debt leverage of the next two years, Moody’s said. Paramount operates iconic networks like MTV and Nickelodeon and owns franchises that include Mission Impossible and Star Trek.
Shares of the company were little changed at $15.09 at the close Thursday in New York. They are down 11% this year.
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