Story perspectives

S&P to Downgrade Paramount Skydance to BB Post-Deal

5/21/2026

Summary

S&P Cuts Paramount

S&P will cut Paramount Skydance Corp.’s rating to BB when Warner Bros. Discovery acquisition closes, at which point Paramount will assume $30 billion of Warner Bros. Discovery debt and add debt for the $110 billion merger.
S&P projects leverage of 7.6× in 2026 and 5× through 2029.
The Ellison pledged to lower leverage below 3.75× by 2028 and to 3.0× in 2029.

Summary

Paramount Sets Deadline

Paramount Skydance set an internal deadline of July 15 to close its acquisition of Warner Bros. Discovery.
Shareholders of both companies have approved the merger, removing a key hurdle.
Paramount has asked the FCC to clear the deal’s foreign-investment portion, which will give investors outside the United States a 49.5 % equity stake.
If the transaction stalls beyond September 30, Warner Bros. Discovery shareholders will receive a 25-cent-per-share quarterly ticking fee.

History

Historical Context

After AOL bought Time Warner in 2000—giving AOL 55% control and later triggering a $99 billion loss in 2002—media giants have repeatedly chased scale. In April 2026, Paramount Skydance agreed to purchase Warner Bros. Discovery for $110 billion, pending FCC approval, a deal that echoes the earlier merger’s ambition and debt concerns and could prompt tighter leverage rules.

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S&P Cuts Paramount

S&P will cut Paramount Skydance Corp.’s rating to BB when Warner Bros. Discovery acquisition closes, at which point Paramount will assume $30 billion of Warner Bros. Discovery debt and add debt for the $110 billion merger.
S&P projects leverage of 7.6× in 2026 and 5× through 2029.
The Ellison pledged to lower leverage below 3.75× by 2028 and to 3.0× in 2029.

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