Business
Paramount credit downgraded to ‘junk’ status over debt worries
Paramount Skydance’s jubilation over its come-from-behind victory to claim Warner Bros. Discovery has entered a new phase:
Call it the deal-debt hangover.
Two major ratings agencies have raised concerns about Paramount’s credit because of the enormous debt the David Ellison-led company will have to shoulder — at least $79 billion — once it absorbs the larger Warner Bros. Discovery, bringing CNN, HBO, TBS and Cartoon Network into the Paramount fold.
Fitch Ratings said Monday that it placed Paramount on its “negative” ratings watch, and downgraded its credit to BB+ from BBB-, which puts the company’s credit into “junk” territory. Fitch said it took action due to “uncertainty” surrounding Paramount’s $110-billion deal for Warner Bros. Discovery, which the boards of both companies approved on Friday.
S&P Global Ratings took similar action.
To finance the Warner takeover, Ellison’s billionaire father, Larry Ellison, has agreed to guarantee the $45.7 billion in equity needed. Bank of America, Citibank and Apollo Global have agreed to provide Paramount with more than $54 billion in debt financing.
“Potential credit risks include the prospective debt-funded structure, Fitch’s expectation of materially elevated leverage and limited visibility on post-transaction financial policy and capital structure,” Fitch said.
Late last week, Paramount sent $2.8 billion to Netflix as a “termination fee” to officially end the streaming giant’s pursuit of Warner Bros. That payment paved the way for Warner and Paramount’s board to enter into the new merger agreement.
Paramount hopes the merger will be wrapped up by the end of September. It needs the approval of Warner Bros. Discovery shareholders and regulators, including the European Union.
Paramount executives acknowledged this week the new company would emerge with $79 billion in debt — a considerably higher total than what Warner Bros. Discovery had following its spinoff from AT&T. That 2022 transaction left Warner Bros. Discovery with nearly $55 billion of debt, a burden that led to endless waves of cost-cutting, including thousands of layoffs and dozens of canceled projects.
Warner still has $33.5 billion in debt, a lingering legacy that will be passed on to Paramount.
Paramount plans to restructure about $15 billion in Warner Bros. Discovery’s existing debt.
Paramount CEO David Ellison at a 2024 movie premiere for a Netflix show.
(Evan Agostini / Invision / AP)
Paramount told Wall Street it would find more than $6 billion in cost cuts or “synergies” within three years — a number that has weighed heavily on entertainment industry workers, particularly in Los Angeles.
Hollywood already is reeling from previous mergers in addition to a sharp pullback in film and television production locally as filmmakers chase tax credits offered overseas and in other states, including New York and New Jersey.
Some entertainment executives, including Netflix Co-Chief Executive Ted Sarandos, have speculated that Paramount will need to find more than $10 billion in cost cuts to make the math work. More recently, Sarandos went higher, telling Bloomberg News that Paramount may need $16 billion in cuts.
Cognizant of widespread fears about additional layoffs, Paramount Chief Operating Officer Andrew Gordon took steps this week to try to tamp down such concerns.
Gordon is a former Goldman Sachs banker and a former executive with RedBird Capital Partners, an investor in Paramount and the proposed Warner Bros. deal. He joined Paramount last August as part of the Ellison takeover.
During a conference call Monday with analysts, Gordon said Paramount would look beyond the workforce for cuts because the company wants to maintain its film and TV production levels.
Paramount plans to look for cost savings by consolidating the “technology stacks and cloud providers” for its streaming services, including Paramount+ and HBO Max, Gordon said. The company also would search for reductions in corporate overhead, marketing expenses, procurement, business services and “optimizing the combined real estate footprint.”
It’s unclear whether Paramount would sell the historic Melrose Avenue lot or simply centralize the sprawling operations onto the Warner Bros. and Paramount lots in Burbank and Hollywood.
Workers are scattered throughout the region.
HBO, owned by Warner Bros. Discovery, maintains its West Coast headquarters in Culver City; CBS television stations operate from CBS’ former lot off Radford Avenue in Studio City; and CBS Entertainment and Paramount cable channels executive teams are located in a high-rise off Gower Street and Sunset Boulevard, blocks from the Paramount movie studio lot.
“The combination of PSKY and WBD could create a materially stronger business than either individual entity,” Standard & Poor’s said in its note to investors. “However, this transaction presents unique challenges because it would involve the combination of three companies, with the smallest, Skydance, being the controlling entity.”
David Ellison’s production firm, Skydance Media, was the entity that bought Paramount, creating Paramount Skydance.
Ellison has not announced what the combined company will be called.
Paramount shares closed down more than 6% Tuesday to $12.45.
Warner Bros. Discovery fell 1% to $28.20. Netflix added less than 1% to close at $97.70.
Business
Disneyland Resort President Thomas Mazloum named parks chief
Disneyland Resort President Thomas Mazloum has been named chairman of Walt Disney Co.’s experiences division, the company said Tuesday.
Mazloum succeeds soon-to-be Disney Chief Executive Josh D’Amaro as the head of the Mouse House’s vital parks portfolio, which has become the economic engine for the Burbank media and entertainment giant. His purview includes Disney’s theme parks, famed Imagineering division, merchandise, cruise line, as well as the Aulani resort and spa in Hawaii.
Jill Estorino will become the head of Disneyland Resort in Anaheim. She previously served as president and managing director of Disney Parks International and oversaw the company’s theme parks and resorts in Europe and Asia.
Estorino and Mazloum will assume their new roles on March 18, the same day as D’Amaro and incoming Disney President and Chief Creative Officer Dana Walden.
“Thomas Mazloum is an exceptional leader with a genuine appreciation for our cast members and a proven track record of delivering growth,” D’Amaro said in a statement. “His focus on service excellence, broad international leadership and strong connection to the creativity that brings our stories to life make him the right leader to guide Disney Experiences into its next chapter.”
Mazloum had been about a year into his tenure at Disneyland. Before that, he was head of Disney Signature Experiences, which includes the cruise line. He was trained in hospitality in Europe.
In his time at Disneyland, Mazloum oversaw the park’s 70th anniversary celebration and recently pledged to eliminate time limitations for park-hopping, which are designed to manage foot traffic at Disneyland and California Adventure.
Mazloum will now oversee a 10-year, $60-billion investment plan for Disney’s overall experiences business, which includes new themed lands in Disneyland Resort and Walt Disney World. At Disneyland, that expansion could result in at least $1.9 billion of development.
The size of that investment indicates how important the parks are to Disney’s bottom line. Last year, the experiences business brought in nearly 57% of the company’s operating income. Maintaining that momentum, as well as fending off competitors such as Universal Studios, is key to Disney’s continued growth.
In his new role, Mazloum will have to keep an eye on “international visitation headwinds” at its U.S.-based parks, which the company has said probably will factor into its earnings for its fiscal second quarter. At Disneyland Resort, that dip was mitigated by the park’s high percentage of California-based visitors.
Times staff writer Todd Martens contributed to this report.
Business
What soaring gas prices mean for California’s EV market
It has been a bumpy road for the electric vehicle market as declining federal support and plateauing public interest have eaten away at sales.
But EV sellers could soon receive a boost from an unexpected source: The war in Iran is pushing up gas prices.
As Americans look to save money at the pump, more will consider switching to an electric or hybrid vehicle. Average gas prices in the U.S. have risen nearly 17% since Feb. 28 to reach $3.48 per gallon. In California, the average is $5.20 per gallon.
Electric vehicles are pricier than gasoline-powered cars and charging them isn’t cheap with current electricity prices, but sky-high gas prices can tip the scales for consumers deciding which kind of vehicle to buy next.
“We probably will see an uptick in EV adoption and particularly hybrid adoption” if gas prices stay high, said Sam Abuelsamid, an auto analyst at Telemetry Agency. “The last time we had oil prices top $100 per barrel was early 2022 and that’s when we saw EV sales really start to pick up in the U.S.”
In a 2022 AAA survey, 77% of respondents said saving money on gas was their primary motivator for purchasing an electric vehicle. That year, 25% of survey respondents said they were likely or very likely to purchase an EV.
As oil prices cooled, the number fell to16% in 2025.
In California, annual sales of new light-duty zero-emission vehicles jumped 43% in 2022, according to the state’s Energy Commission. The market share of zero-emission vehicles among all light-duty vehicles sold rose from 12% in 2021 to 19% in 2022.
“Prior to 2022, we didn’t really have EVs available when we had oil price shocks,” Abuelsamid said. “But every time we did, it coincided with a move toward more fuel-efficient vehicles.”
Dealers are anticipating a windfall.
Brian Maas, president of the California New Car Dealers Assn., predicted enthusiasm for EVs will rebound across California if oil prices don’t come down.
“If prior gasoline price spikes are any indication, you tend to see interest in more fuel-efficient vehicles,” he said.
Rising gas prices could be a lifeline for EV makers at a time when federal support for green cars has been declining.
Under President Trump, a federal $7,500 tax incentive for new electric vehicles was eliminated in September, along with a $4,000 incentive for used electric vehicles.
In California, the zero-emission vehicle share of the total new-vehicle market was 22% through the first 10 months of 2025, then dropped sharply to 12% in the last two months of the year, according to the California Auto Outlook.
Meanwhile Tesla, the most popular EV brand in the country, has grappled with an implosion of its reputation with some consumers after its chief executive, Elon Musk, became one of Trump’s most vocal supporters and helped run the controversial Department of Government Efficiency.
Over the last several months, Ford, General Motors and Stellantis have pared back EV ambitions.
Other automakers, including Nissan, announced plans to stop producing their more affordable electric models.
The Trump administration has moved to roll back federal fuel economy standards and revoked California’s permission to implement a ban on new gas-powered car sales by 2035.
David Reichmuth, a researcher with the Clean Transportation program in the Union of Concerned Scientists, said the shift in production plans will affect EV availability, even if demand surges.
That could keep people from switching to cleaner vehicles regardless of higher gas prices.
“This is a transition that we need to make for both public health and to try to slow the damage from global warming, whether or not the price of gasoline is $3 or $5 or $6 a gallon,” he said.
According to Cox Automotive, new EV sales nationally were down 41% in November from a year earlier. Used EV sales were down 14% year over year that month.
To be sure, oil prices can fluctuate wildly in times of uncertainty. It will take time for consumers to decide on new purchases.
Brian Kim, who manages used car sales at Ford of Downtown LA, said he has yet to see a jump in the number of people interested in EVs, hybrids or more fuel-efficient gas-powered engines.
Still, if the price at the pump stays stuck above its current level, it could happen soon.
“Once the gas prices hit six [dollars per gallon] or more and people feel it in their pocket, maybe things will start to change,” he said.
Business
Nearly 60 gigawatts of U.S. clean power stalled, trade group finds
A total of 59 gigawatts of U.S. clean energy projects are facing delays at a time when demand for power from AI data centers is surging, according to a trade group study.
Developers are seeing an average delay of 19 months over issues such as long interconnection times, supply constraints and regulatory barriers, the American Clean Power Assn. said in a quarterly market report.
The backlog is happening despite the growing need for power on grids that are being taxed by energy-hungry data centers and increased manufacturing. The Trump administration has implemented a slew of policies to slow the build-out of solar and wind projects, including delaying approvals on federal lands.
The potential energy generation facing delays is the equivalent of 59 traditional nuclear reactors, enough to power more than 44 million homes simultaneously.
“Current policy instability is beginning to impact investor confidence and negatively impact project timelines at a time when demand is surging,” American Clean Power Chief Policy Officer JC Sandberg said in a statement.
Despite the hurdles, developers were able to bring more than 50 gigawatts of wind, solar and batteries online in 2025, accounting for more than 90% of all new power capacity in the U.S., the report found. Clean power purchase agreements declined 36% in 2025 compared with 2024, signaling that the build-out of clean power in the U.S. could be lower in the 2028 to 2030 time period, according to the report.
Chediak writes for Bloomberg.
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