Paramount Global’s Near-Term Credit Outlook Is “Not Going To Change Just Because They’re Being Bought By Skydance,” S&P Analyst Says

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Skydance‘s $8 billion deal to merge with Paramount Global has been characterized in some corners of the industry as a rescue mission.

But one Wall Street media veteran thinks it’s premature to say the worst is behind the company. “Secular trends” like cord-cutting and declining TV ratings are “not going to change just because they’re being bought by Skydance,” said Naveen Sarma, managing director at S&P Global Ratings and sector lead for the firm’s U.S.

media and telecom group. “Maybe Skydance will have a strategy that addresses some of that, but over the next, call it, year or so, year and a half, we’re going to see a company that’s going to go through a lot of upheaval because of the transaction.” Sarma spoke at the UBS Media and Communications Conference on the event’s annual panel scrutinizing the credit outlook for media companies.

Credit is distinct from a company’s overall financial condition and operating strength, but thriving with a poor rating from S&P or Moody’s is difficult because of how crucial it is for companies to fund their ambitions with low-interest corporate debt.