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WBD writes down the value of its TV networks by $9.1 billion


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Warner Bros. Discovery in its earnings says its TV assets are worth $9 billion less than it had assessed, because of weak advertising and the NBA.

 

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Warner Bros. Discovery just realized its TV networks are worth $9.1 billion less than it originally thought, leading to a net loss of $10 billion in the second quarter of 2024.

 

The massive plummet in valuation is being recognized as a “non-cash goodwill impairment charge” primarily coming from the “Networks” section of the company. That must have been one eye-opening internal audit.

 

WBD blames the devastating change in value to the “difference between market capitalization and book value” due to a soft U.S. advertising market and “uncertainty” surrounding future carriage deals. And oh yeah, the loss of the NBA certainly doesn’t help.

 

 

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4 hours ago, Brian said:

It’s been a constant dumpster fire with him in charge so I’m sure they will continue to let him lead. 

 

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Warner Bros. Discovery could become a target for an activist shareholder if Zaslav doesn't start to deliver wins for shareholders.

 

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Warner Bros. Discovery CEO David Zaslav needs a win. Soon.

 

Since merging Discovery with WarnerMedia in 2022 and immediately slashing billions in costs, Zaslav has struggled to convince shareholders that his company is a worthy investment.

 

Warner Bros. Discovery shares have fallen about 70% since April 8, 2022, the day the merger closed. His tenure has been defined by implementing thousands of layoffs, cutting movies and TV series for tax efficiencies, killing off CNN+ a month after its launch, hiring and firing CNN CEO Chris Licht, getting heckled at Boston University’s commencement by students chanting “pay your writers” during last year’s writers’ strike, and suing the NBA after the league chose not to renew media rights with his company following nearly 40 years in business together.

 

Making matters worse for him, Zaslav has long been one of the highest paid CEOs in the country. His 2023 compensation rose 26.5% to almost $50 million. Zaslav’s bonus is tied to increasing free cash flow and reducing debt, a mandate driven by John Malone, the media mogul and influential board member who has championed Zaslav, first at Discovery and now at Warner Bros. Discovery, which has a market capitalization of about $17 billion and $37.8 billion in debt.

 

The stock dropped roughly 9% in trading Thursday. The company took a whopping $9.1 billion impairment charge Wednesday given the loss of value in its linear cable networks — which still accounts for more than 100% of the company’s adjusted EBITDA. That means the rest of the company lost money.

 

Warner Bros. Discovery blamed “the continued softness in the U.S. linear advertising market and uncertainty related to affiliate and sports rights renewals, including the NBA” for the size of the write-down.

 

That’s not music to investors’ ears.

 

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10 hours ago, thewhyteboar said:

Hey WBD, I could lose you $9.1 billion too, and I could do it for like half of what you're paying Zaslav!

 

Right? I screwed up a lot of things in my life but I'd love to fail as well as Zaslav.

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