Paramount Skydance launches $7.5 billion loan for WBD acquisition

MUMBAI: Hollywood’s biggest deal is piling on the debt, with Paramount Skydance putting another $7.5 billion financing brick on the road to Warner Bros Discovery. Paramount Skydance has launched a syndication for a proposed $7.5 billion senior secured term loan as it assembles the financing package for its proposed acquisition of Warner Bros Discovery, according to a Reuters report.

The loan, structured as an incremental Term B facility, remains subject to market conditions and other customary closing conditions. Alongside the new facility, Paramount Skydance is planning to raise around $44.4 billion in additional secured debt to fund the transaction.

The company plans to use proceeds from the new borrowing, together with cash on hand and previously announced equity financing, to fund the Warner Bros Discovery acquisition and repay part of its existing debt.

Once the transaction is completed, the combined company is expected to carry around $80 billion in debt, Reuters reported, putting financing at the centre of a deal that would reshape two major Hollywood businesses under one corporate roof.

The latest debt move comes days after Paramount settled litigation with a group of US states led by California and the Writers Guild of America over the proposed $110 billion transaction.

The settlements removed key domestic legal hurdles to the deal. As part of the arrangements, Paramount agreed to increase its film production in the US and establish an editorial-independence board overseeing CBS and CNN.

The settlements also helped avoid a potential forced sale of assets, including CNN and certain film franchises, according to media reports.

The proposed acquisition would bring Warner Bros Discovery’s film and television assets under Paramount Skydance, potentially creating a significantly larger media and entertainment operation.

The financing, however, is only one part of the route to closing. The transaction remains subject to applicable closing conditions and regulatory processes.

The financing push follows a legal challenge launched in July, when California and 11 other US states sued to block Paramount’s proposed acquisition of Warner Bros Discovery.

The states raised concerns about the potential impact of the combination on competition across the film and television industries, including movie theatres, pay-TV distributors, consumers and workers.

Their arguments have focused on the potential bargaining power of a larger combined company across film distribution and cable television, as well as the broader entertainment ecosystem. The states have also questioned whether Paramount’s proposed commitments would adequately address those concerns.

Paramount, meanwhile, has argued that the transaction would strengthen its ability to invest in film production rather than reduce output. CEO David Ellison has said the combined film operation would target around 30 movie releases a year.

With the $7.5 billion Term B facility now entering syndication and another $44.4 billion in secured debt planned, the proposed deal is moving into a financing phase where the numbers are almost as eye-catching as the Hollywood assets changing hands.