The Grill Room The Zaz Report
Jun 3, 2025
Bill Cohan, a financial expert and partner at Puck, joins to dissect the recent credit downgrade of Warner Bros. Discovery. He questions whether David Zaslav can effectively spin off cable assets amidst looming debt repayment challenges. The conversation also highlights Paramount's urgent negotiations with Skydance to secure a deal before a critical conference. Cohan breaks down the implications of these corporate strategies on market perceptions and the shifting dynamics in the media landscape.
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WBD's Credit Downgrade Puzzle
- Warner Bros. Discovery's credit downgrade puzzles analysts despite $21 billion debt reduction.
- S&P doubts EBITDA growth, expecting it to stay around $9 billion due to mixed streaming gains and cable losses.
Spinoff Impact on Credit Ratings
- The planned spinoff of WBD's cable assets is widely anticipated but complicates credit ratings.
- S&P finds no upgrade for streaming and studios post-spin, which seems counterintuitive given growth prospects.
Downgrade Eases Acquisition Concerns
- Downgrade of WBD's debt removes large payout risk on change of control, potentially easing acquisition worries.
- This change may open up buyer interest and reduce financial stress despite the negative rating move.