Warner Bros. Discovery Downgraded to Junk by S&P

The media and entertainment company Warner Bros. Discovery Inc was downgraded to below investment grade by S&P Global Ratings, according to a report on Tuesday. The issuer credit rating was lowered to BB+, one notch below investment-grade’s lowest rung of BBB-.

The downgrade to junk status was largely the result of continued revenue and cash flow declines at its linear television business, S&P said. The ratings agency expects leverage to rise to 4.3 times at the end of 2025, significantly higher than 3.5 times leverage threshold for investment-grade ratings. A cut to junk level can dramatically boost a company’s borrowing costs.