Paramount takes on $7.5 billion more debt to push its $111 billion Warner Bros. Discovery merger closer to the finish line

Paramount is getting closer to acquiring Warner Bros. Discovery, but its debt is increasing in the process. Recently, the media company overcame its last obstacle in securing the merger by settling the antitrust lawsuit brought by 12 attorneys general and WGA.

The media company is positive that it will be able to complete the merger in 2 weeks. While that might just happen, the media company, after it is merged with Warner Bros. Discovery, is expected to be on its way to have a net debt of $77.2 billion by the end of 2026.

Paramount-Warner Bros. Discovery debt keeps increasing

Paramount beat Netflix's bid for buying Warner Bros. Discovery by offering $31 per share, bringing the latter's enterprise value to approximately $111 billion. Now, as Variety reports, the media company is seeking to raise $7.5 billion through loans from a group of lenders to help fund its $111 billion merger with Warner Bros. Discovery and repay some of its existing debt.

According to Variety, in a statement, Paramount said:

“Paramount intends to utilize the net proceeds of these borrowings, together with cash on hand and the net proceeds of the previously announced equity financing, to finance the purchase price for its previously announced acquisition of Warner Bros. Discovery, Inc. and the repayment of certain existing debt.”

The media company has said that it plans to borrow around $44.4 billion more in secured debt, on top of the financing it had already announced. However, the company still needs to finalize these borrowings, depending on market conditions and other factors.

Morgan Stanley analysts estimated that, by the end of 2026, the media company merged with Warner Bros. Discovery would have around $77.2 billion in net debt. Since Paramount is now looking to borrow even more money, analysts' estimate of the company's total net debt will most likely go up.

Larry Ellison, who is the founder of Oracle and father to the Paramount CEO, David Ellison, has personally guaranteed $46.7 billion in funding for the Warner Bros. Discovery takeover. The media company has also secured $24 billion in commitments from sovereign wealth funds in Saudi Arabia, Qatar, and the United Arab Emirates. According to the media company, these three funds would collectively own 38.5% of the combined company formed post-merger.

The merger is nearing completion after the media company reached a settlement regarding the antitrust lawsuit brought by 12 state attorneys general and WGA. But that's not the end. A judge will hold a hearing on Thursday, September 24, 2026, to review the proposed agreement. If the judge approves it, the merger is expected to close in about two weeks.

While the attorneys general and the WGA have settled with the David Ellison-led company ahead of a trial, the groups behind the Block the Merger coalition haven't. They have made a final attempt to stop the merger, by filing an emergency request to U.S. District Court Judge Martínez-Olguín. In their request they asked the following:

“to grant interested parties the opportunity to formally oppose the weak and unenforceable consent decree that state attorneys general entered into with Paramount on Monday.”

It is yet to be seen whether this request will be heard and what the next steps might be. Paramount and Warner Bros. Discovery's projected final debt for 2026 is a high number, which is extremely concerning. When the merged company earns billions from this merger, most of it will go into interest payments, repayment of loans/bonds, and other financial obligations.

That will leave the company with considerably less money for making films, producing TV shows, investing in streaming, expanding internationally, and paying shareholders. The future of media will thus be at stake if the merged company has so much debt to pay back.

Stay tuned for further updates.

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