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Netflix offers $2 billion in debt to fund content acquisitions, production

Netflix released its plans Oct. 21 to offer $2 billion in debt, in both U.S. dollars and euros, to finance content acquisitions, production and development. Funds may also be used for capital ...
October 21, 2019

Netflix released its plans Oct. 21 to offer $2 billion in debt, in both U.S. dollars and euros, to finance content acquisitions, production and development.

Funds may also be used for capital expenditures, investments, working capital and potential acquisitions and strategic transactions.

In a letter to shareholders Oct. 16, the streaming giant reported its debt had climbed to US$12.4 billion as of Sept. 30, up from $10.4 billion in December 2018.

The company also stated its plans to expand its investment in local language original films and unscripted series for the third quarter of 2019. It will continue to focus its original offering as studios increasingly pull second-run content.

Netflix’s revenue for Q3 exceeded expectations, climbing to $5.2 billion. Though, the company said in the letter it anticipates “modest headwind” to its near-term growth as it faces an onslaught of competition from streamers such as Disney+, HBO Max and Apple TV+.

“Many are focused on the ‘streaming wars,’ but we’ve been competing with streamers (Amazon, YouTube, Hulu) as well as linear TV for over a decade,” the company stated. “In the long-term, though, we expect we’ll continue to grow nicely given the strength of our service and the large market opportunity.”

The interest rate, redemption provisions, maturity rate and other terms of the debt, to be offered in two series, will be determined by negotiations between Netflix and the initial purchasers, the company stated in a release.

 

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About The Author
Barry Walsh is editor and content director for realscreen, and has served as editor of the publication since 2009. With a career in entertainment media that spans two decades, prior to realscreen, he held the associate editor post for now defunct sister publication Boards, which focused on the advertising and commercial production industries. Before Boards, he served as editor of Canadian Music Network, a weekly music industry trade, and as music editor for HMV.com. As content director, he also oversees the development of content for the brand's market-leading events, the Realscreen Summit and Realscreen West, as well as new content initiatives.

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