Paramount Global‘s credit rating has been lowered to junk status by S&P Global, which cited the toll of ongoing pay-TV declines as a key factor in the downgrade. The company said Wednesday it dropped Paramount’s rating to BB+ from BBB- due to the “accelerating declines in linear media and the shift toward a more competitive and less certain streaming model.”
In a new report titled Pouring Recessionary Gasoline On a Secular Fire, S&P Global outlines trends that will increase the pressure on an already challenged media industry. “Margins and cash flow for global media companies, more than their leverage, will remain depressed as streaming struggles to achieve profitability and linear TV weakens,” is the bottom line, as far as S&P is concerned.
Cord cutting is expected to grow in 2021 and 2022, offset somewhat by growth of virtual multichannel video programming distributors, according to a new report from S&P Global. S&P said legacy MVPDs — cable, satellite and telco — will lose 8.2% of their subscribers in 2020 after losing 7.9% in 2019. In 2022, another 10.3% of subscribers are expected to cut the cord.
S&P Global’s 34th annual Radio and TV Summit last week addressed a range of topics, including the lack of consolidation following the FCC’s spectrum auction; the state of retransmission consent and reverse comp; and an overview of the good and bad news coming from the spot TV ad market.
They are predicted to climb to $12.8 billion, boosted by growing contributions from virtual MVPDs like DirecTV Now and Playstation Vue.
