Paramount Skydance secures $54B-$57.5B debt for $110B Warner Bros. Discovery deal
In brief
- Bank of America and Citigroup committed $54B-$57.5B in debt financing for the all-cash deal
- Combined entity projected to carry $79B-$87B in total debt after closing
- Post-merger leverage ratio estimated at 6 to 6.5 times EBITDA
- Transaction expected to close Q3 2026 pending regulatory approval
Debt load and leverage metrics
The combined entity is expected to carry somewhere between $79 billion and $87 billion in total debt after closing. That debt load translates to a post-merger leverage ratio projected to land at approximately 6 to 6.5 times EBITDA — a substantial financial burden that will shape the merged company's strategic flexibility for years.
For context, leverage ratios above 5 times EBITDA are considered elevated in media and entertainment. The combined Paramount-WBD will operate at the upper end of that spectrum, constraining capital allocation and limiting room for acquisitions or major investments until debt is paid down.
Merger timeline and regulatory hurdles
Warner Bros. Discovery shareholders ratified the merger on April 23, 2026, clearing one of the major hurdles. The transaction is expected to close in the third quarter of 2026, though regulatory approvals in both the US and Europe are still pending.
Paramount offered $31 per share in an all-cash deal, plus a potential ticking fee for shareholders. The offer emerged after Netflix was among the companies that submitted offers for WBD, but Paramount's bid ultimately secured board approval.
Bondholder consent and execution risk
One significant hurdle has already been cleared. Bondholders have already granted consent for amendments to existing debt terms in light of the merger, which removes one layer of execution risk.
Still, the debt financing itself carries execution risk. The $54 billion to $57.5 billion commitment from major banks is contingent on market conditions and regulatory sign-off. If credit markets tighten or regulators raise objections before close, the financing could face renegotiation or repricing.
