Paramount's $54B debt clouds its bid for Warner Bros. Discovery
Paramount Skydance wants to buy Warner Bros. Discovery (WBD) with an all-cash offer valued at $108.4 billion in enterprise value ($30 per share), but they'd also be taking on a massive $54 billion in debt to make it happen.
This bold move puts them head-to-head with Netflix, which just struck its own deal for WBD's studio and streaming services.
Where the money's coming from—and why it's risky
To pull this off, Paramount is relying on big investors like the Ellison family and Middle Eastern funds, plus huge loans from major banks.
But here's the catch: experts warn that taking on so much debt—possibly up to seven times what Paramount earns—could push their finances into dangerous territory, making future repayments tough.
High-stakes breakup fees
If WBD accepts Paramount's offer over Netflix's, WBD will owe Netflix a $2.8 billion breakup fee; if Netflix walks away from their side of things, it costs them even more at $5.8 billion.
In short: this is a high-risk play in the streaming wars that could shake up who owns your favorite shows and movies.