ViacomCBS was facing a rough year. How the coronavirus made it even worse

ViacomCBS is proving that it’s a tough time to be the smallest major media company.

The company alerted Wall Street analysts Friday that it was abandoning its financial guidance for the year.

“The impact of COVID-19 on ViacomCBS’ businesses — including the postponement of theatrical releases domestically and internationally, cancellation or rescheduling of sports events for which the company had broadcast rights, and production delays in television and filmed entertainment programming — could be material to the company’s operating results, cash flows and financial position,� ViacomCBS said in a regulatory filing. It noted that the media company would cut costs to help shore up its position.

ViacomCBS’s stock closed down 8.5% on Friday to $12.79 a share.

It has been a bruising year for controlling shareholder Shari Redstone, who triumphed in her long-held plan to reunite her family’s two media companies — Viacom Inc. and CBS Corp. — in early December. She wanted to bring more heft and luster to the company her father built: Viacom, owner of cable channels Comedy Central, MTV, Nickelodeon, VH-1, BET and the struggling Paramount Pictures movie studio. Adding CBS, which boasts America’s most watched TV network, was intended to propel Viacom to greater heights.

But Wall Street didn’t share Redstone’s enthusiasm, and the coronavirus outbreak only added to the company’s woes.

The stock has plummeted 68% since the two companies came together in early December, creating ViacomCBS.

“The market has been incredibly swift to punish the merger of Viacom and CBS … and that was even before the COVID19-led sell-off,� analyst Michael Nathanson wrote in a report to investors.

After markets closed Friday, ViacomCBS announced that it had raised $2.5 billion in a debt offering that it hopes to close by Wednesday. The New York-based company said it would use the net proceeds for “general corporate purposes, which may include repayment of outstanding indebtedness.�

Wall Street greeted the news positively, sending ViacomCBS shares slightly higher in after-markets trading.

Nonetheless, Friday’s dual actions underscore the challenges facing the company, which relies heavily on advertising. In the last few months, ViacomCBS has announced plans to sell CBS’ historic headquarters in midtown Manhattan, a fortress known as Black Rock. It also intends to shed CBS’ iconic Simon & Schuster book publishing house. ViacomCBS plans to wait to sell Black Rock after the financial markets stabilize.

ViacomCBS isn’t the only company suffering amid the pandemic. Walt Disney Co. has seen its stock tumble 34% this year. A week ago, the Burbank entertainment giant said it raised $6 billion in the debt markets for “general corporate purposes.� On Friday, the company said Disneyland and Walt Disney World theme parks would remain closed “until further notice� due to the coronavirus outbreak.

Philadelphia cable giant Comcast Corp., which owns NBCUniversal, earlier this week raised $4 billion in a debt offering. Its stock is down nearly 24% this year.

The crisis hit home for the company on Thursday when NBCUniversal Chief Executive Jeff Shell said that he was recovering from COVID-19. That news came two days after the International Olympic Committee and the Japanese government announced the postponement of this summer’s Tokyo Olympics until next year.

ViacomCBS’ disclosures came one day after the Redstone family investment vehicle, National Amusements Inc., announced that it restructured its agreements with lenders and refinanced its $125-million revolving credit facility. National Amusements had to cancel another $75 million line of credit for its NAI Entertainment Holdings Inc.

S&P Global ratings downgraded National Amusements’ credit and said the firm would remain on its CreditWatch.

The Massachusetts based firm, which is the holding company for the ViacomCBS voting shares, said it did not plan any stock sales. But it will need to keep its chain of movie theaters afloat, and the carnage to the movie theater business has been unprecedented.

Nathanson, the analyst, recommended the company take drastic measures, including selling Showtime or Paramount Pictures, to improve its position. The Melrose Avenue studio has long been the favorite asset of 96-year-old Sumner Redstone, who is in poor health.

Nathanson also questioned whether the company’s CBS All Access streaming service should license its best programming to another outlet, rather than making it exclusive to its service. CBS All Access streams “Star Trek: Picard� and “The Good Fight.�

“Absent a major change in the direction of ViacomCBS, we do not think investors will embrace the company’s asset mix or business plan,� Nathanson wrote.

A ViacomCBS spokesman declined to comment.

The market valuation for ViacomCBS stands at $8 billion, a fraction of what the two companies were worth just six months ago.