Fitch keeps WBD on rating watch negative post-Paramount Skydance deal announced
TL;DR
Fitch Ratings places Warner Bros Discovery on negative watch after Paramount Skydance's $110 billion acquisition, citing high debt and financial risks. The deal, set to close in Q3 2026, raises concerns over leverage and competitive pressures in media.
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Fitch keeps WBD on rating watch negative post-Paramount Skydance deal announced
Fitch Places Warner Bros Discovery on Negative Rating Watch Following Paramount Skydance Acquisition
Credit rating agency Fitch Ratings has placed Warner Bros Discovery (WBD) on a negative watch following Paramount Skydance’s announced $110 billion acquisition of the media company, citing concerns over increased leverage and financial uncertainty. The transaction, expected to close in Q3 2026, will be financed with $54 billion in debt commitments, resulting in a combined entity with net debt of approximately $79 billion.
Fitch downgraded Paramount’s credit rating to ‘BB+’—junk status—on March 3, 2026, reflecting "materially elevated leverage" post-acquisition and limited clarity on Paramount’s post-transaction capital structure. The agency highlighted risks tied to the debt-funded deal, including potential free cash flow constraints and competitive pressures in the media sector. Paramount’s existing $14 billion in outstanding debt as of year-end 2025 further amplifies concerns.
The acquisition follows Netflix’s withdrawal from a prior agreement with Warner Bros Discovery, which owned HBO Max. Fitch emphasized that final terms of the Paramount-WBD deal, including debt management strategies, will determine whether further downgrades occur. "Limited visibility on post-transaction financial policies remains a key credit challenge," the agency noted.
Paramount currently holds speculative-grade ratings from S&P Global and lower-investment-grade ratings from Moody’s, both of which also placed the company on negative watch in late February. The move underscores broader skepticism about the combined entity’s ability to manage debt amid intensifying competition in streaming and content production.
Investors are advised to monitor Paramount’s progress in securing financing approvals and its plans to address debt servicing. With the media landscape evolving rapidly, Fitch’s negative outlook signals heightened scrutiny of the acquisition’s long-term financial viability.
[^NUMBER]: Citations derived from Fitch Ratings and Reuters reports dated March 3, 2026.
