Standard & Poor's Lowers Rating On Warner Music Group
November 19, 2010 at 4:00 AM (PT)
STANDARD & POOR'S has lowered its rating of WARNER MUSIC GROUP CORP. YESTERDAY (11/18) to "B+" from "BB-." The new rating keeps WMG with a "Stable" outlook, pointing out the label has potential to improve its digital music revenue. S&P does feel the company will still struggle as physical media becomes increasingly less relevant to sales.
BLOOMBERG NEWS reports the ratings fall into the "speculative" category, and reflect S&P's belief that the music label is too risky an investment to be considered for the safer investment-grade category.
The report says it downgraded WMG's rating "because it believes the company's business will continue to suffer as digital music sales become more important than sales of CDs and other physical media. In fact, the agency believes WARNER will struggle even though it believes the label's digital sales have good potential for growth."
Shares of WARNER MUSIC GROUP CORP. closed at $5.52, up 10 cents.
Keep Up To Date With Our Industry's Financials