After reaching a deal with Warner Bros. Discovery, Fitch downgrades Paramount

Credit rating agency Fitch Ratings downgraded Paramount Skydance and Paramount Global to junk status on Monday night. Following the media company’s proposed acquisition of Warner Bros Discovery.

In a note on Monday, Fitch analysts said they expect Los Angeles-based Paramount to have “materially elevated leverage” following its successful acquisition of Warner Bros Discovery.

The rating agency placed Paramount on watch for a possible further downgrade once the final terms of the acquisition and financing structure. Its plans to address that debt become clear.

“Potential credit risks include the likely debt-financed structure, Fitch’s expectation of significantly elevated leverage. Limited visibility into post-transaction financial policy and capital structure,” Fitch analysts wrote.

In April, Paramount announced that it has reached an agreement to purchase Warner Bros. Discovery for 110,000 million dollars, following Netflix’s cancellation of its agreement with HBO Max’s owner. According to the companies, it is anticipated that the transaction will close in the third quarter. It is supported by 54,000 million dollars in debt commitments.

According to Paramount, the merged company will have almost $79 billion in net debt as a result of the deal.

Fitch analysts reported on Monday that Paramount had $14 billion in outstanding debt at the end of 2025. Including junior subordinated debt and senior unsecured debt.

To Fitch, Paramount’s downgrades are also a result of ongoing challenges to its free cash flow from acquisition and content spending, as well as pressure from the media industry.

At the moment, Paramount has lower investment-grade ratings from Moody’s and speculative-grade ratings from S&P.

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