Fitch Ratings has downgraded Paramount Global and its subsidiary Paramount Skydance Corporation to 'BB+' from 'BBB-', officially moving the company's long-term credit rating into 'junk' status. This significant financial shift comes after Paramount Global's definitive merger agreement on February 27, 2026, to acquire Warner Bros. Discovery Inc. in a deal valued at $110 billion.

The downgrade reflects analyst concerns regarding the substantial financial implications of the acquisition. The combined entity is projected to carry approximately $79 billion in net debt, a figure that analysts at Fitch consider a significant strain. The rating agency also placed all of Paramount's ratings on 'Rating Watch Negative,' signaling the potential for further downgrades. Fitch specifically highlighted competitive pressures across the media sector, ongoing free cash flow headwinds from transformation costs, and limited visibility on the post-transaction financial policy and capital structure as key factors in their decision.

Paramount Global's acquisition of Warner Bros. Discovery, which saw it pay $31 per share in cash for WBD after winning a bidding war against Netflix Inc., is largely debt-funded. The deal involves $47 billion in equity from the Ellison Family and RedBird Capital Partners, supplemented by $54 billion in debt commitments from major financial institutions including Bank of America, Citigroup, and Apollo. Paramount CEO David Ellison has stated that the combined company expects to realize over $6 billion in synergies and cost savings. The transaction is anticipated to close in Q3 2026, pending regulatory clearances and WBD shareholder approval.