Tons of Debt Backed Paramount Takeover of Warner Bros.

Paramount Pictures and Warner Bros. together control about 30% of the US box office, according to Bank of America (BofA), with major franchises including Star Trek, Harry Potter and DC Comics under their umbrella, Barron’s Daily reported.

Paramount plans to increase streaming output and release 30 films a year—15 from each studio. (Photo: Coolcaesar, Wikimedia Commons)

Although traditional linear television is shrinking, the combination of networks such as CBS, TNT and CNN could help slow that decline while expanding the company’s video content library.

Still, integrating such large properties will not be easy.

Paramount plans to increase streaming output and release 30 films a year—15 from each studio.

That level of production “is a significant undertaking and outcomes are uncertain,” BofA analyst Jessica Reif Ehrlich wrote.

The takeover was financed with $100 billion in debt backed by Larry Ellison, raising questions about how the company will service that debt while also satisfying investors’ expectations for profits.

Balancing aggressive expansion with shareholder demands will be difficult. Ellison appears willing to pay premium prices to expand Paramount’s content portfolio.

The company has already secured rights to South Park and TKO Group content.

“Indications are Paramount Skydance paid well above the next-best offer for both deals,” Ehrlich said.

“We believe management will continue this aggressive posture with respect to content investment.”