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Rebooting The U.S. Media Sector In A Post COVID-19 World

Rebooting The U.S. Media Sector In A Post COVID-19 World

It's been just three months since the global COVID-19 pandemic entered the U.S., and brought major portions of the U.S. media and entertainment industry to a screeching halt. As discussed in the S&P Global Ratings March 2020 report "COVID-19 Increases Pressure On Global Media & Entertainment Ratings," the media subsectors hurt most by the pandemic-driven social distancing measures and government-mandated closures have been out-of-home entertainment, which include live-events companies, travel-related companies, trade show and conference operators, theme park operators, film and TV studios, and movie exhibitors. Additionally, media companies dependent on advertising revenues such as digital publishers, television, radio, outdoor, and print-based media, are also suffering, though more from the accompanying economic recession than the pandemic itself. Here, we tackle what the recovery path back to "normalcy" for the global media and entertainment sector could look like. We discuss possible structural and secular changes within media subsectors, and consider the pandemics longer-term repercussions on ratings. For details on our ratings actions to date, please refer to our companion report released today entitled "Pandemic And Recession Deal Blows To Credit Metrics Of U.S. Media And Entertainment Industry."


What Could A Recovery For The Media Sector Look Like?

The short answer is, the path to recovery will vary by media subsector. The pandemic is affecting the global media and entertainment industry in two ways. First, the pandemic immediately affected all out-of-home entertainment companies, those that deal with live events such as sports events, concerts, Broadway shows, and conferences and trade shows, but also those companies that operate movie theaters, museums, and theme parks. We believe the timetable for recovery for these companies may lag not only the general economic recovery but also the end of formal social distancing measures. Reopenings may vary by country and even by region within each country. This is especially true in the U.S. because responsibility for resuming operations lies with individual states. Even after travel and social distancing restrictions are lifted, consumers may still be unwilling to return to these venues until they feel safe. For some, this may not be until a vaccine is successfully developed or until a reliable treatment has demonstrated success. In short, consumer behavior and how out-of-home entertainment businesses operate may temporarily, if not permanently, change following this pandemic.

We expect U.S. advertising spending to decline significantly in the second quarter of 2020, show some modest growth spurts in the third quarter, followed by more substantive improvements in the fourth quarter. We expect this recovery to be uneven in both timing and degree, depending on the medium. Key risks to our forecast are a more tepid economic recovery and the timing of the return of major sports leagues. If major sports programming doesn't resume in September (in particular, the National Football League and major college football), we believe major national advertisers may slash their advertising budgets. For a detailed look at our 2020 forecast by media segment, please see "The COVID-19 Fallout Is Squeezing U.S. Advertising Spending More Than Expected," published May 21, 2020.

What Could Happen To Advertising?

Recessions lead to inflection points, accelerating already existing secular trends. After the 2008 Great Recession, several media sectors that were already under secular pressures went into steep decline. The radio industry began its current decline after the 2001 recession because significant ad inventory expansion undercut pricing discipline, but permanently lost 25% of ad revenues after the 2008 recession. Similarly, prior to 2008, print advertising in newspapers and magazines had been modestly growing despite facing increasing secular pressures from digital platforms. The 2008 recession accelerated a consumer shift to digital from print resulting in a two-thirds loss of advertising revenues in the newspaper and magazine industry since 2006. We believe similar outcomes could result from this crisis, though it's unclear which media sectors will suffer most or how severe the pain will be.

Linear television could find itself in the hot seat this time around. Pressure has been building on advertising in the sector for years as the audiences decline and ad pricing (as defined by CPMs, or cost per mille) steadily grows. We believe this pandemic could be an inflection point for three reasons: pricing for ad inventory may be reset lower because of both the recession and lack of sports programming, advertisers now have alternatives to linear television such as streaming video services, and the decline in audience ratings for scripted programming (in particular, dramas) has been so steep that advertisers may no longer be willing to pay current CPM prices for many cable networks, especially the higher-priced general entertainment networks.

While consumers are watching more "television" than ever, they're watching scripted content (e.g., comedies and dramas) on streaming services such as Netflix, Amazon Prime, and Hulu. Advertisers have been unable to follow, however, because many of these streaming services are ad-free. For years though, those that showed ads didn't have the ad inventory scale or broad audience reach or placed ads opposite content that advertisers deemed unsuitable for their brands. More recently, there are more advertising-based streaming platforms (or hybrid platforms offering limited advertising) with scale such as Hulu, CBS AllAccess, and Pluto TV. These platforms have grown their scale organically or were acquired by global media companies that could leverage their own linear television scale to expand advertising on the streaming platforms. As a result, advertisers now have an efficient way to follow viewers. We believe the global media companies can influence how quickly ad dollars migrate away from linear television because the same companies that own the linear television networks own most of the large ad-based streaming platforms. We don't believe this ad migration will affect all linear television. Live events such as sports and news will likely remain on linear television because that's still the best way to reach the broadest audiences and thus the principal way for brands to advertise.

Advertising agencies

Ad agency revenues are highly correlated with global GDP and advertising spending. As consumer demand for products and services has plummeted and the global economy has descended into recession, advertisers have responded by cutting back on marketing spending.

To assess the eventual pace of ad market recovery, we look to key economic indicators, including GDP growth rate, consumer spending, and unemployment rates as barometers of economic recovery and eventual ad agency growth. As global economies gradually begin to reopen in the second half of 2020, we would expect a recovery in economic growth and consumer spending to drive ad spending, reversing some of the substantial declines these agencies experienced in the first half of the year. We believe an economic recovery presents an opportunity for the ad agencies to prove their value to their marketing clients. If that recovery is uneven, marketers will need to adjust their messaging on a real-time basis based on the state of recovery. We expect the industry will return to pre-COVID growth levels in mid to late 2021, in line with our expectations for a return to normalized economic growth.

Although we don't expect the COVID-19-related economic slowdown to result in any permanent shifts in the advertising agency landscape, we believe prepandemic secular trends will continue to impact the industry post the economic recovery. In particular, we expect increasing audience fragmentation and the shift toward digital advertising to accelerate. This will create opportunities for small independent digitally focused advertising agencies and for consulting and technology companies to increase their share of less scale-intensive digital advertising services such as programmatic advertising and data analysis. We would expect this increased competition to continue to pressure fees in certain parts of the advertising agency market. However, we still believe the large holding companies will use their size, scale, and global presence to maintain their leading market positions, even as we expect modestly lower long-term growth rates.

Movie exhibitors

All of the major movie exhibitors currently plan to reopen their U.S. theaters in July, although there's considerable risk to that timeline, especially as key markets in the Northeast may remain closed through the summer (California recently announced that theaters may open with restrictions as soon as June 12). Warner Bros.' "Tenet" and Disney's "Mulan" are the only key blockbuster films remaining on the July film-release slate. If the release of these films were to be delayed, substantial theater attendance wouldn't occur until at least the release of Warner Bros.' "Wonder Woman 1984" on Aug. 14. Even if theaters across the nation reopen in the third quarter of 2020, it could take months for attendance to return to "normal" levels. While the studios have a growing backlog of films to release to the theaters, consumers' discomfort with attending public events may take longer to overcome. When current shelter-at-home restrictions are eased, local and national governments may still extend social distancing restrictions for some time, which would almost certainly affect theater attendance, for instance via limiting seating capacity. Until theaters are allowed to operate without restrictions, studios will likely allow their films to have extended theatrical windows and be shown on more screens.

We don't expect theaters to fully return to 2019 attendance levels until there's a vaccine or treatment that eases customers' fear of infection and eliminates the need for social distancing. While we expect the virus to continue to weigh on exhibitor results, the film slate remains attractive and there's pent-up demand for out-of-home entertainment, which we expect will contribute to attendance returning to about 80%-90% of 2019 levels in 2021 and returning to more normalized levels in 2022.

As long as the industry remains closed, credit measures continue to deteriorate. AMC Entertainment Inc. recently launched an exchange offer for its subordinated notes (we treat this proposed transaction as a distressed exchange). In addition, Cineworld Group PLC's liquidity remains tight, despite the increase in its revolving credit facility and covenant waiver that it recently obtained. Cinemark is better positioned than its peers to weather a slower recovery due to its better liquidity position and lower leverage, but if theaters remain closed beyond July, the film slate is delayed further, or if recovery is slower than we expect, it's likely we would take additional negative rating actions across the entire industry.

With theaters closed, film studios, including the major ones (e.g., Warner Bros., Disney/20th Century Studios, Sony, Paramount, and Universal Entertainment Corp.) have experimented with using alternate distribution channels such as premium video on-demand (PVOD)--$19.99 rental or by releasing directly to a streaming service. We believe theaters will remain the only viable distribution channel for fully monetizing a large-budget tent-pole film, but studios will likely pressure exhibitors on small to midsize films. Studios that are integrated with transactional home video platforms, such as Warner Bros. (with DIRECTV) and Universal (with Comcast Cable), stand to gain the most from PVOD as they'll get 100% of rentals on their platforms, instead of the 70% split a studio normally gets on a nonproprietary platform. These two major studios will likely push the hardest for a PVOD window within the traditional 90-day theatrical release window. Exhibitors have always strongly opposed any change to the theatrical window, but the success of PVOD during the pandemic could embolden studios to bypass theaters altogether especially for smaller films if theaters aren't willing to compromise.

Additionally, almost all studios have captive proprietary subscription streaming services and need exclusive content to attract new subscribers. If studios can prove they have viable alternatives to monetize mid-budget films, it would increase their leverage in negotiating windowing and film-rental agreements. Exhibitors pay the studios a share of ticket sales that scales with the box office gross of the film. Small to midsize films account for roughly 50% of the total box office, and we believe they provide even more of a theater's net-admissions revenue (after film rent). If studios successfully modify the theatrical window, or release more films directly to PVOD or to streaming services so the number of films released theatrically declines, we believe the box office wouldn't likely recover to 2019 levels and would likely result in a weaker competitive position for exhibitors.

Film and television production

The film and TV production industry has been modestly impaired by the pandemic because principal photography has been halted since March and theatrical movie releases have been postponed to the second half of 2020 because theaters are closed. We believe the production halt is temporary and expect production will resume later in the summer as government-mandated lockdowns end (California recently gave its approval for film and TV production to resume on June 12). We expect that filming of unscripted programming and studio-based programming, which require smaller crews, will return more quickly. In our view, these delays don't materially change the nature of content production going forward and we expect a return to normal, if not modestly higher, production levels in 2021 (limitations on studio space, talent, and production crews will make it difficult to extend beyond current production levels). We believe that most production schedules will simply just slip. Still, some projects may get cancelled because of potential challenges in rescheduling talent, production crews, and studio space or because financing simply is no longer available, as some broadcasters cut their programming spending.

The demand for new, original film and TV content is likely to grow robustly as newly launched streaming services compete against existing services for new subscribers. We believe this trend will benefit television production more than film. It's possible the pandemic could have a lasting impact on the film industry because it has caused massive disruption to movie exhibitors. Specifically, we expect exhibitors to recover slowly as government-imposed social distancing measures limit theater capacity. While film studios will continue releasing films in wide theatrical releases, we expect the release slate to continue skewing toward big-budget blockbuster films as smaller-budget films get crowded out. We believe this shift could result in film studios producing fewer midsize budget movies or more of these films being released through alternative distribution methods, such as streaming services or premium video on demand (PVOD) instead of traditional theatrical distribution.

Live events

We expect the live events industry, including primary and secondary ticketing providers, event promoters, and venue operators, will be challenged to return their operating performance to 2019 levels before 2022. The industry, including concerts, theater, and sports, has been completely shut down globally since March 2020 and we don't expect a solid return to large-scale, in-person live events until late in 2020, at the earliest. Importantly, a return to large-scale live events will depend on a number of factors including favorable federal and local government regulations reflecting a lower risk of COVID-19 infections, advantageous timing decisions by sports leagues and other business partners, increased consumer confidence, and the willingness of performers such as music artists and athletes to resume performing. We expect attendance levels to be significantly below full capacity upon the initial resumption of live events and for there to be a gradual increase in capacity over time as venue operators enact substantial health and safety measures to ensure audience safety. Despite our expectations for a gradual recovery, we would expect the live events industry to return to similar secular growth trends once a health resolution is achieved for COVID-19. Longer-term, we don't believe consumers will devalue the experience that in-person live events provide and we believe that COVID-19 will only reduce growth temporarily before trends return to their previous trajectory.

All live events companies have been damaged over the past few months by dramatic revenue declines, and they've implemented substantial cost and liquidity actions to limit the hit to earnings. Importantly, a number of live events companies have permanently added to their debt burdens to shore up liquidity during this period of minimal revenue generation. Companies are also managing their fixed costs by implementing layoffs, furloughs, and working-capital initiatives. Even with these substantial liquidity and cost initiatives, we expect revenue losses to be so substantial that we anticipate very poor leverage and cash flow credit metrics in 2020 before some recovery of credit metrics in 2021. We believe a return to 2019 operating levels will depend not only on the success of these cost-management and liquidity-saving actions, but also each company's respective ability to scale operations and their cost base at pace with increasing revenues. At the same time, they must maintain healthy relationships with customers and business partners during this turbulent period. While we expect long-term industry growth trends to eventually return to pre-COVID levels, we expect the recovery of credit metrics to pre-COVID levels will take longer than the recovery of revenue and EBITDA due to the debt that was added to some companies' capital structures to provide a liquidity bridge while operations were halted.

Theme parks

While a number of theme parks have, or have plans to, open up (these include Disney's Shanghai park (May 11), Six Flags Frontier City in Oklahoma (June 5), Universal Orlando (June 5), SeaWorld Orlando (June 11), and Walt Disney World (July 11 and July 15)), we believe that theme parks' path back to normalcy will be much slower than global GDP. When current stay-at-home restrictions ease, local and national governments may still impose social distancing restrictions or even capacity utilization limitations on public venues. We also believe many consumers will continue to be wary of attending theme parks, or other large public gatherings, until either a COVID-19 vaccine is available or the true nature and risk of the virus is better understood.

For theme parks to begin to return to normalcy, consumers will likely need to believe they won't be exposed to the virus while visiting the parks. This may be somewhat easier for outdoor theme parks, than for indoor activities. For companies like Disney and Comcast, whose theme parks are mainly destination attractions, they'll likely recover more slowly than regional theme parks due to lingering travel-related concerns. Regional theme parks, on the other hand, could benefit from pent-up demand, accessibility by car, and limited required planning as an alternative to other leisure activities. A lengthening of the economic recession beyond our base forecast could further impair consumer discretionary spending, which would likely delay the return to normalcy. Given the slow and potentially uneven recovery in attendance and revenues, theme park operators face the additional challenge of how to bring cost structures back online. It's likely that operating costs will come back more uniformly than revenues resulting in lagging financial metrics. Accordingly, we're forecasting a gradual ramp up in theme park attendance over the next three years, notwithstanding a potential re-emergence of the pandemic. As a result, we believe theme park revenues may decline by well over 50% in 2020, and will, despite strong growth, still be below 2019 levels in 2021 (we forecast regional theme parks will be about 10% lower while destination theme parks will be 15-20% lower). We believe theme park revenues will only return to 2019 levels in 2022, at the earliest.

Television -- The decline of the video bundle

We believe the combination of continued audience declines, pressure on advertising, and increase in cord-cutting will accelerate the decline of the video bundle, post pandemic. While the pace at which video subscribers dropped their service (so-called cord-cutting) may temporarily slow during this pandemic as trapped consumers may watch more television and thus place greater value on their video service, we believe the rate of cord cutting will likely pick up for two reasons--persistent high unemployment rates and a lack of sports programming, which will make more consumers question the value of the video bundle. In addition, the longer the economy remains in recession, the greater the rate of cord cutting.

We expect the impact to each media company's operational and financial results will vary by company. The broadcast networks and TV station operators will be less affected as they're positioned better within the bundle because they offer local news and sports programming. These operators are currently generating healthy per subscriber pricing increases as they're using their broad reach to get higher rates and we expect the impact from increased cord-cutting should be a modest slowing in their affiliate fee growth rates. On the other hand, many cable networks, especially those without sports or news, are already seeing weak per subscriber price increases and thus may begin to consistently report declines in affiliate fees. By itself, we don't expect this to result in near-term ratings actions, but this trend will certainly pressure cable network cash flows and force cable network operators to spend less on programming, making it more difficult for them to compete for audience attention.

Premium networks

The status of premium cable networks (HBO, Showtime, Starz, and Epix), which were once the standard for high quality scripted television programming, has been under growing pressure over the past several years due to the rise of streaming services like Netflix, Amazon, and Hulu. With significantly smaller content budgets, limited programming hours to fill, and higher profitability targets than streaming platform competitors, subscriber growth at the premium cable networks has stagnated. With growing pressure to spend more on original programming, margins and cash flow have declined. Additionally, as premium cable networks create their own streaming platforms to expand their subscribers outside of the traditional video bundle, it has begun the process of de-linking these networks from the traditional video distribution model. The recent launch of HBO Max and the planned relaunch and rebranding of ViacomCBS's streaming platforms including CBS All Access and Showtime later this summer will likely accelerate these trends and could, over time, lead to the streaming services replacing these stand-alone cable networks.

As premium networks become more like streaming services they'll benefit from having more control over the customer relationship and more flexibility with respect to programming decisions, it will also lead to more subscriber volatility and potentially higher churn levels as they're increasingly de-bundled from larger video packages. We believe the short-term impact to these media companies will be modestly negative as the transition will create more subscriber volatility and higher content and marketing spend to drive subscriber acquisition and retention. Longer-term, a successful transition could prove to be more positive as premium networks decouple from the declining pay-tv bundle, control more of the customer relationship, and garner more of the economics compared to the legacy video distribution model.

Local Media (Television, Radio, And Out-of-home)

We expect local advertising will incur the steepest declines in the second quarter of 2020 and start to improve in the third and fourth quarters of 2020 as the economy begins to show signs of recovery. Local advertising is typically a short-term buy (measured in weeks) such that advertisers can quickly cancel their commitments, but also can re-enter quickly when the environment improves. We expect local broadcast television advertising revenue will return to 2019 levels in the fourth quarter of 2020 due to record levels of political advertising revenue associated with the U.S. presidential election. Meanwhile, we expect out-of-home advertising revenue won't recover to 2019 levels until the fourth quarter of 2021 and believe broadcast radio advertising revenue will never return to 2019 levels. As we look for local advertising to improve in the second half of 2020, risk remains that some small and midsize businesses may permanently close or hold off on advertising until they can strengthen their balance sheets.

We expect ongoing secular declines in broadcast radio advertising (primarily due to competition from internet advertising) will prevent broadcast radio revenue from fully returning to 2019 revenue levels. However, unlike the 2008/2009 recession (where the industry permanently lost roughly 25% of its broadcast advertising revenue), we believe broadcast radio advertising will return to above 90% of 2019 levels over the course of 2021. Digital advertising was nascent in the last recession and we believe the impact of digital disruption will play less of a role in the recovery from this recession. In addition, radio companies have since significantly invested in their own digital offerings (streaming apps, station websites, and social media) to compete. The price of broadcast radio advertising has also declined over time (about one-third the price of television), which presents an attractive return on revenue for advertisers.

We expect out-of-home advertising will have a slower recovery ramp because it not only relies on the health of advertisers, but also consumers leaving their homes. We believe out-of-home advertising in small and midsize markets will recover faster than in large markets because consumers that rely on driving may be more comfortable leaving the house sooner than those who rely on public transportation. We believe the expiration of stay-at-home orders and data on driving and passenger traffic will help to signal improvements in the sector. Despite the current pressures facing out-of-home advertising, we believe out-of-home advertising will fully recover by 2021, notwithstanding a longer economic recession, as it faces limited substitution from other forms of advertising and initiatives to convert static billboards to digital support modest share gains from other forms of media (e.g., television, radio, and digital).

Within the local media industry, the majority of negative rating actions stemming from the U.S. recession (brought on by the coronavirus pandemic) have been within the broadcast radio sector. This is because more than 90% of the sector's revenue comes from broadcast radio advertising. If broadcast radio advertising improves as we expect in 2021, there could potentially be a path back to 2019 rating levels for some radio companies in 2022, most likely those that are larger with greater digital capabilities and exposure to national advertising. However, some radio companies may not survive the current U.S. recession and some smaller, pure-play, radio companies may not be able to sufficiently improve credit metrics to warrant higher ratings. However, if broadcast radio advertising revenue doesn't recover in 2021 and its share of total advertising dollars further declines as a result of the current recession, there could be further rating pressure in the sector.

On the other end of the spectrum, our ratings on television station broadcasters have largely been unaffected because, despite declines in local television advertising, these companies benefit from relatively stable retransmission revenue (more than 40% of total revenue) and political advertising revenue.

Travel-Related Companies

Near-term revenue trends for travel-related companies, such as Expedia and Booking Holdings Inc., will likely be more severe and the recovery will likely be slower for the sector than that for the overall economy. We expect the second quarter of 2020 to represent the peak of the declines with air traffic as measured by route passenger kilometers (RPK) down more than 90% in many regions and a subsequent, albeit gradual, improvement through 2020 into the following years. The International Air Transport Association (IATA) expects that global air traffic will return to 2019 levels only in 2023. As a result, we expect the industry would need to make significant changes to their cost base to accelerate the return to profitability.

Success in creating an effective vaccine, broad availability and application of the vaccine to stem the spread of the virus are key to resumption of travel to pre-pandemic levels. Notwithstanding, we expect that local and domestic travel will grow at a faster rate than international travel and certain segments such as home rentals will likely grow faster than business travel. We expect that businesses will likely curtail nonessential employee travel and use virtual meeting options to ensure employee safety as well as to reduce costs. In addition, all of the rated travel companies have undertaken significant cost-reduction measures to reduce cash burn in 2020 and support a faster return to profitability. All said, downside risks to ratings stemming from a subsequent wave of viral infections, and economic recession continue to remain high for the sector in the absence of an effective vaccine.

COVID-19 Accelerating Secular Shifts

One of the effects of the Covid-19 pandemic has been to accelerate existing secular trends. Media sectors focused on in-home-entertainment options, such as video streaming services, music streaming, and video game publishers, have benefitted from shelter-at-home orders as consumption of their services has skyrocketed since the beginning of the pandemic. The secular trend toward both video and music streaming has been a consistent theme for the past several years and has benefitted streaming services like Netflix, Amazon Prime, Hulu, and Spotify. The pandemic has accelerated this trend with all streaming services reporting stronger subscriber and revenue growth. For example, in the first quarter of 2020, which only included one month or less of results from the onset of the pandemic in both Europe and the U.S., Netflix added 15.8 million subscribers (about 9% sequential growth). This is the fastest sequential growth rate in more than four years. We don't think these growth rates will persist as lockdown measures ease but will pull forward demand and increase user engagement, which have positive implications for these companies.

Video game publishers have also seen engagement increase significantly and we think these trends will continue because video games are one of the least disrupted media sectors. The companies have experienced minimal disruption in their ability to create content, unlike counterparts in traditional media that have seen production halted for the past few months, and they have the ability to continue developing content to meet higher user engagement. Additionally, as video games have become increasing social due to the secular trend toward digitization, gamers have the ability to stay connected with friends while maintaining social distancing. We think these trends will continue to benefit video game publishers after the pandemic passes.

Effect Of The New Normal On Credit Ratings

While it's one thing to speculate on future revenue and cash flow trends resulting from this pandemic, it's far more difficult to opine on the trajectory of our credit ratings. This report details our sector assumptions regarding recovery and indicates that we believe revenues and credit metrics could generally return to 2019 levels by 2021 (2022 for some subsectors), our credits ratings on these companies may not recover at the same pace. That's because our view of many media businesses--their strengths, weaknesses, and competitive positioning versus both their peers and other media sectors--may change because of the trends unleashed or accelerated by the pandemic. Our view of specific companies' businesses (that and credit metrics are key components in determining our credit ratings) will be a more complex exercise because many companies have multiple business lines, with evolving strategies. We may find when evaluating our rated companies that existing businesses may have either weakened or strengthened, depending on the situation, and that new businesses may have strengthened our overall view of their businesses.

S&P Global Ratings acknowledges a high degree of uncertainty about the rate of spread and peak of the coronavirus outbreak. Some government authorities estimate the pandemic will peak about midyear, and we're using this assumption in assessing the economic and credit implications. We believe the measures adopted to contain COVID-19 have pushed the global economy into recession (see our macroeconomic and credit updates here: As the situation evolves, we will update our assumptions and estimates accordingly.

Related Research

  • Pandemic And Recession Deal Blows To Credit Metrics Of U.S. Media And Entertainment Industry, June 10, 2020
  • The COVID-19 Fallout Is Squeezing U.S. Advertising Spending More Than Expected, May 21, 2020
  • Credit Conditions North America: Pressures Persist, Risks Resound, April 23, 2020
  • Economic Research: An Already Historic U.S. Downturn Now Looks Even Worse (Apr 16, 2020)

This report does not constitute a rating action.

Primary Credit Analyst:Naveen Sarma, New York (1) 212-438-7833;
Secondary Contacts:Thomas J Hartman, CFA, Chicago (1) 312-233-7057;
Jawad Hussain, Chicago + 1 (312) 233 7045;
Vishal H Merani, CFA, New York (1) 212-438-2679;
Rose Oberman, CFA, New York 212-438-0354;
Dylan S Singh, New York + 1 (212) 438 1095;
David Snowden, CFA, Chicago (1) 312-233-7077;
Scott E Zari, CFA, Chicago + 1 (312) 233 7079;

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