Bulletin: Cox Enterprises Inc. Could Absorb Potential $1 Billion Penalty In Piracy Suit

NEW YORK (S&P Global Ratings) Dec. 23, 2019--S&P Global Ratings said today that Cox Enterprises Inc. has capacity within the current rating to absorb a potential $1 billion penalty for piracy liability. The U.S. District Court jury in Virginia recently awarded $1 billion in damages to plaintiffs Sony Music, Universal Music Group, Warner Music Group, and EMI. The recording labels accuse Cox of deliberately refusing to take reasonable measures to combat copyright infringers using its internet service. We believe the penalty Cox will ultimately pay is uncertain and could be significantly lower than $1 billion, as Cox plans to appeal this decision and vigorously defend its case. We believe the appeals process could take up to a year or more.

...December 23, 2019 NEW YORK (S&P Global Ratings) Dec. 23, 2019--S&P Global Ratings said today that Cox Enterprises Inc. has capacity within the current rating to absorb a potential $1 billion penalty for piracy liability. The U.S. District Court jury in Virginia recently awarded $1 billion in damages to plaintiffs Sony Music, Universal Music Group, Warner Music Group, and EMI. The recording labels accuse Cox of deliberately refusing to take reasonable measures to combat copyright infringers using its internet service. We believe the penalty Cox will ultimately pay is uncertain and could be significantly lower than $1 billion, as Cox plans to appeal this decision and vigorously defend its case. We believe the appeals process could take up to a year or more. However, even in the worst-case credit scenario involving a debt-funded payout, we project debt to EBITDA would increase only about 0.2x to around 2.3x based on our 2020 operating assumptions. This would leave the company with ample cushion...

Bulletin