Paramount debt to reach $79b after Warner Bros deal

Paramount said its US$110 billion deal to buy Warner Bros would create a combined company with about US$79 billion in net debt and would not divest or spin off cable assets.

David Ellison, Paramount CEO, said on a call with analysts the companies will fold Paramount+ and HBO Max into a single streaming platform.

Ellison said the combined group already serves more than 200 million direct-to-consumer subscribers in more than 100 regions.

Andy Gordon, Paramount strategy chief, said the acquisition is expected to save more than US$6 billion, with a big share from non-labor sources such as combining streaming technology stacks and cloud providers.

The deal is backed by US$54 billion in debt commitments from Bank of America, Citigroup, and Apollo, including US$39 billion of new debt and US$15 billion to refinance Warner Bros’ existing bridge facility, Gordon said.

Warner Bros Discovery had about US$29 billion in net debt, while Paramount had US$10.4 billion at the end of last year.

The acquisition is expected to close in the third quarter of 2026.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

Paramount’s winning bid was structured to outlast Netflix

Paramount prevailed in a drawn-out bidding fight, repeatedly raising its bid against a Netflix deal for parts of Warner Bros. Discovery 1.
To ease board doubts, Paramount added a ticking fee of $0.25 per share per quarter, about $650 million per quarter, if closing slips past Dec. 31, 2026 2.
Earlier, the board called Paramount’s proposal a high-risk leveraged buyout, citing $87 billion in total pro forma gross debt and gross leverage around 7x 2026E EBITDA (earnings before interest, taxes, depreciation, and amortization) before synergies 3.
Closing support came from a $43.3 billion personal guarantee by Oracle co-founder Larry Ellison, covering the equity financing plus certain damages claims 2.

The deal’s biggest hurdle may be in state courts, not federal agencies

EU antitrust approval may come with only minor divestments if regulators ask for them, yet Paramount said it cleared the statutory DOJ waiting period through an unusual approach that may narrow the federal challenge window, though DOJ could still intervene 4.
Next, state scrutiny may take center stage, since California’s attorney general has promised a “vigorous” merger investigation 5.
Any state case could target theatrical film distribution and related markets, where Paramount plus Warner Bros. Pictures would hold about 34.54% of domestic market share in 2025 under one cited analysis 6.
Political heat adds to the legal risk, as lawmakers question news media consolidation and the merger would put CBS News with CNN under common control 7.