Hollywood studio Paramount Global has been downgraded to junk status by S&P. S&P cited a continued decline in cable TV subscribers as the reason for the credit rating change.
Paramount, which owns numerous terrestrial TV properties including CBS, Nickelodeon, MTV, BET and Comedy Central, faces similar dire economic forecasts as other legacy studios.
American households continue to cut the cord by the millions, depriving studios of lucrative transportation dollars. At the same time, TV advertising revenues are plummeting due to weak consumer sentiment caused by historic levels of inflation brought about by the Biden administration.
Studios are betting the farm on streaming entertainment to save themselves, but most are still unable to monetize streaming. Last year, Paramount lost more than $1 billion in six months on streaming.
The result is a media doom loop that threatens to undermine Hollywood’s most revered institution.
S&P announced that it downgraded Paramount’s ratings due to the “accelerating decline of linear media and the shift to a more competitive and less reliable streaming model.”
“Paramount needs to implement a plan to significantly improve its streaming losses over the next two years to alleviate further downgrade pressure.”
Paramount’s streaming services include Paramount+ and Pluto TV.
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