The Media Industry’s Debt Dilemma

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Media companies face a debt dilemma as the economy wavers — and those with weaker balance sheets need novel ways to keep investor confidence

With the current macroeconomic slowdown and increased recession risk, the Federal Reserve has been on an interest-rate hiking spree. This is driving borrowing costs to rise rapidly, which is causing stress for companies with weaker balance sheets.

It’s no question that the major shifts in the media business over recent years were costly but necessary for survival. Legacy media giants began taking on debt and poured heaping amounts of cash to fund their streaming endeavors. AT&T often used to top the debt list; however, after offloading WarnerMedia, Comcast took over the top spot. Warner Bros. Discovery ranks third upon completion of its merger in April.

A debt-to-equity ratio is a method of measuring a company’s financial leverage by dividing long-term debt by stockholders’ equity. It’s important when assessing the health of a company because it reveals how much of a company’s operations are being financed by debt versus wholly owned funds. When a company has a higher D/E ratio, it is often viewed as a riskier investment.

 

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Just create good content that the customer wants. Example is Top Gun Maverick.

so much debt by the 'top' 3.

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