Fitch Downgrades Warner Bros Discovery to Junk Status, Signaling Media Sector Strain

Warner Bros Discovery''s credit rating was slashed to junk status by Fitch Ratings, casting a shadow over the media giant''s restructuring plans. The agency cited increased fragility from the company''s planned split into streaming and legacy cable units, warning of potential multi-notch downgrades. With $37 billion in debt and shrinking operational flexibility, the MOVE signals broader turbulence in traditional media.

The downgrade immediately escalates borrowing costs for Warner Bros, squeezing cash FLOW for content production and debt management. Fitch''s blunt assessment—"Smaller. Less diversified. Highly leveraged. In a declining industry"—resonates across a sector grappling with cord-cutting and streaming wars. While the streaming division retains growth potential, the cable unit now drags like an anchor on the entire operation.