They have over 50 billion in debt with a market cap of around 35 billion. Interest on the debt is around 4.4%, making interest payments in the billions!
They will be decreasing content spending to make aggressive debt payments. Continued lower spending will only hurt their position in the streaming wars. This will lead to decreased growth.
The key question is how will they increase their free cash flows. They only generated 1 billion in free cash flow out of their massive market cap.
They need to increase fcf to around 6 billion to follow through with their deleveraging plan.
How do they increase fcf with only 3.5% projected revenue growth and high overhead?
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