COVID-19 impact: Fox prices $1.2B notes offering, ViacomCBS offers $2.5B

Fox Corp. is the latest media conglomerate to shore up its finances in the face of COVID-19, raising US$1.2 billion in senior notes, with the net proceeds to be used ...
April 1, 2020

Fox Corp. is the latest media conglomerate to shore up its finances in the face of COVID-19, raising US$1.2 billion in senior notes, with the net proceeds to be used for “general corporate purposes.”

The company announced Tuesday (March 31) it was selling $600,000,000 million of 3.050% senior notes due in 2025 and another $600,000,000 million of 3.500% senior notes due in 2030.

In a March 31 filing with the U.S. Securities and Exchange Commission (SEC), Fox said the COVID-19 pandemic is affecting the business in “a number of ways.”

Fox stated in the filing that the “evolving and uncertain” nature of the situation makes it challenging to estimate future performance — including the supply and demand for its services, its cash flows and advertising revenues — and it expects the impact of the coronavirus to have a “material adverse effect” on its financial standing.

Just a few days earlier, on March 27, ViacomCBS offered up $2.5 billion in senior notes, with net proceeds to be used for “general corporate purposes, which may include repayment of outstanding indebtedness,” the media giant stated in a filing with the SEC.

ViacomCBS is offering $1.25 billion of 4.70% senior notes due in 2025 and another $1.25 billion of 4.950% senior notes due in 2031.

The company updated its fiscal outlook for the year in a filing to the SEC on March 26, stating it expects the impacts of COVID-19 — from the postponement of theatrical releases to production delays – to be “material” to its financial standing.

ViacomCBS and Fox join Discovery, The Walt Disney Company and a raft of other media giants establishing a financial cushion for the anticipated fiscal hardship caused by the pandemic.

Discovery, Inc. withdrew its fiscal 2020 outlook on March 25 following the postponement of the Olympic Games to 2021 and the “economic uncertainty” caused by the ongoing COVID-19 pandemic.

On March 12, Discovery said it also drew down $500 million from its $2.5 billion credit facility to “increase its cash position and maximize flexibility.”

Elsewhere, the Walt Disney Company also raised $6 billion in debt on March 20, followed by a CA$1.3 billion offering in 3.057% notes due in 2027, according to an SEC filing on March 26.

In a filing on March 30, Disney’s executive officers agreed to a temporary reduction in base salaries as part of a “series of measures” to “weather the extraordinary business challenges” caused by the health crisis. Executive chairman Bob Iger is forgoing his salary, while newly named CEO Bob Chapek will take a 50% pay cut.

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 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.