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MAJOR Hollywood Film Studio In Dire Straits, Can It Survive Current Crisis?

Major, longtime film studio Paramount is facing increased financial troubles at the once-prosperous Hollywood entertainment pillar.

Following widespread layoffs and revenue shortfalls in its streaming sector, S&P Global has slashed Paramount’s credit rating from BB+ to BBB-.

This puts Paramount’s credit rating in clear junk bond territory and is a reminder to never follow the herd. Bloomberg had more details:

S&P reduced its rating on Paramount debt to BB+ from BBB-, according to a statement Wednesday.

The company, the parent of CBS and MTV, had $14.6 billion in long-term debt at year-end. The company’s bonds declined after the downgrade.

Its 6.375% notes due 2062 widened 18 basis points to 499 basis points over the benchmark, according to pricing source Trace.

Paramount was one of the major film studios that hastily announced a new streaming service at roughly the same time every other film studio and broadcasting network announced their own dedicated streaming services.

Most of these companies, such as Disney, are facing financial shortfalls due to their newly adopted streaming models.

The thing about successful streaming platforms such as Netflix is that they work due to the volume of content compiled from various studios, independent creators, television networks, and their original in-house productions.

All of this is provided to the user for one low price. No one was ever going to pay separate bills to watch the content of each film studio or broadcasting network, as doing this would quickly add up to the $50-$70 cable bills of old.

Multiple outlets confirmed the financial decline of the once-great studio:

Reuters featured this statement from the S&P ratings agency:

“We downgraded Paramount due to the degradation of credit metrics from the accelerating declines in linear media and the shift toward a more competitive and less certain streaming model.

Paramount will need to execute its plan to substantially improve streaming losses over the next two years to mitigate further downside ratings pressure.”


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