Paramount has let the Daily Show stay on the air for years
I expect the credit terms use adjusted EBITDA (rather than EBIT used to reach the 0.73x interest coverage) to establish a minimum interest coverage ratio covenant. Let’s say with all the adjustments to EBITDA they can engineer an opening minimum ICR of at least 1.05x or 1.10x. If it is that low to start, I would expect the minimum ICR to step up to 1.25x in the next 12-18 months, creating pressure to increase EBITDA to alleviate pressure on interest coverage. Likely the easiest pathway will be add-backs for synergies and integration of the combined companies, which means pretty steep layoffs and perhaps some asset sales in the fairly near term since I doubt they’ll be in position to reduce the debt enough to impact the interest coverage. It will probably need to be framed as a Fixed Charge Coverage Ratio anyway (not just interest coverage) and they might have some other components of fixed charges (ditching fixed rental costs? reduced cash tax burden?) that could help maintain covenant compliance under that debt load for a time.
I read a comment on Reddit that amused me, essentially something like...
The combined Paramount-WB claims it will deleverage to investment grade in three years. That means slashing $90 - $100 B in debt in three years. How the fuck will they do that and finance content they need? They’ll have to sell off some libraries of old titles or a film or tv franchise to do that and slash a ton of employees.
Apple also has a great opportunity to build its entertainment portfolio.
www.avclub.com
I do like TCM, which I believe that Warner owns, so I wonder what will happen to it with the takeover. Warner very nearly gutted the network a few years ago until some major Hollywood celebs like Tom Hanks and Steven Spielberg and Martin Scorsese begged them to preserve the network and they did leave most of it in place, but still made some substantial cuts. After this merger I would think that David Ellison & Paramount Skydance will need to make some deep cuts somewhere to cut costs, and TCM may well be on the chopping block.
Just a thought, how would you feel if the channel went away but the entire library moved somewhere online that you could watch on-demand?
That might be OK provided the online library was permanent and couldn't suddenly be yanked away as often happens with streaming services now. Some streaming services are already available for old movies, but their film list is often limited and there are few of the extras I like. Some studios have withdrawn older films from circulation. However, what I like about TCM isn't just that it shows old movies, I like the hosts and the special segments that give you more information and stories about the making of the movies, the special segments like Film Noir and Silent Movies, the documentaries of classic film stars, and so on. I doubt that much of that would be available online. I do think TCM still serves a useful function in preserving and showcasing classic films, and I hope that when cable finally does fade away completely that TCM is able to move fully to streaming or whatever networks are available at the time. It's listed on some streaming services now, but the streaming service lacks some of the features the regular channel offers.
Huh, that’s cool thst TCM provides so much extras and sucks that that stuff probably/likely wouldn’t survive a change.
Their weekly Film Noir series (called Noir Alley) is great, it's hosted by a dude named Eddie Muller who knows his stuff about Noir films and he really gets into his role as host, sometimes wearing a fedora when he introduces a film. The original main TCM host was a former actor named Robert Osborne, who was fantastic and actually had worked in some classic movies, but he passed away a number of years ago. I do like the new main host, Ben Mankiewicz, who is a great-nephew of famous director Joseph Mankiewicz, who directed a lot of classic movies like All About Eve and Cleopatra. Ben did a series on his podcast not too long ago where he discussed how the stress and pressure of directing the trainwreck of a movie known as Cleopatra nearly killed his great-uncle, it was a great listen if you like old movies.Huh, that’s cool thst TCM provides so much extras and sucks that that stuff probably/likely wouldn’t survive a change.
(Full disclosure: I don’t think I’ve ever watched TCM & had no idea they did all of that stuff.)
Now I understand why you’re sad that it might go away.
I just saw this now, for some reason. Thanks.
Huh, that’s cool thst TCM provides so much extras and sucks that that stuff probably/likely wouldn’t survive a change.
(Full disclosure: I don’t think I’ve ever watched TCM & had no idea they did all of that stuff.)
Now I understand why you’re sad that it might go away.
