Advanced Television

S&P marks WBD ‘junk’

May 21, 2025

S&P has downgraded Warner Bros Discovery (WBD) debt to BB+. Anything BB+ and below is junk bond status for the US credit agency.

It said that, from a credit perspective, it’s not a fan of a possible WBD spin-out, teased by CEO David Zaslav last week after an internal split of the company into two divisions (Streaming & Studios and Global Linear Networks). Separation would be “a credit negative,” S&P said.

Linear woes saw S&P lower its forecast for EBITDA for 2025 and 2026 to about $9 billion (€7.9bn) for the next three years. On linear specifically, S&P forecasts that EBITDA at global networks will drop 20 per cent to $6.5 billion due to accelerating revenue declines and elevated content costs from newly acquired sports rights content coupled with its final year of NBA rights in 2025.

“WBD’s total advertising and distribution performance has lagged peers due to its higher exposure to general entertainment content, weaker portfolio of domestic sports rights, which is further exacerbated by the loss of the NBA broadcast rights after the 2024/2025 season, and a smaller base of ad-supported streaming subscribers,” added S&P.

The agency said it does “not expect WBD to materially accelerate deleveraging through asset sales, but to instead prioritise investment in its growth businesses, which will extend the deleveraging path.”

WBD recently confirmed it will switch the name of Max, its fast flagship streaming platform, back to HBO Max in the summer. But even in streaming, S&P expects the pace to moderate in 2026 with ramped up investment in content, marketing and international expansion as it launches in key markets such as the UK.

WBD carries approximately $38 billion of gross debt at the end of the quarter.

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