Netflix shoots down rumours that it is saddled with $20bn of debt
Netflix has moved quickly to shoot down suggestions that it is mired in $20bn of debt, sparking fears as to the sustainability of the streaming service, by describing such reports as ‘inaccurate’.
Netflix shoots down rumours that it is saddled with $20bn of debt
The storm first broke when the LA Times published a piece claiming that Netflix had been on a bigger binge than its customers having amassed eye-watering liabilities of $20.54bn in ‘long-term debt and obligations’.
With speculation then going into overdrive Netflix felt obliged to go public with its balance sheet in order to reassure subscribers and investors, asserting that its actual level of debt stood at a still substantial $4.8bn.
Responding to Digital Spy a Netflix spokesperson said: “The L.A. Times story inaccurately calculates our debt, counting our streaming obligations (i.e. our content contracts with studios) of $15.7bn as debt, which it isn't.
"The correct number: we have total gross debt of $4.8bn vs. our equity market value of about $75bn. They have since corrected the story."
The LA Times arrived at their higher figure by factoring in the $15.7bn of ‘future content expenses’ but Netflix was at pains to stress these liabilities were by no means unique to it with Disney/ESPN on the hook for $49bn for sports content alone.
Netflix posted more positive numbers last month when it celebrated expanding its global subscriber base to 104m.