A valuation write-down of its TV networks has seen Warner Bros Discovery announce a loss of $10bn in just one quarter.
Again proving that big business exists in a reality far outside our own, Warner Bros Discovery has announced a quarterly net loss of $10bn. The staggering figure came about because the company had to revise the valuation of its TV networks, which it turns out were worth $9.1bn less than it had originally estimated.
That write-down in turn came about due to tumbling advertising revenues and viewing figures.
Of the losses, Warner Bros CEO and serial film deleter David Zaslav told investors (via The Financial Times) “It’s fair to say that even two years ago, market valuations and prevailing conditions for legacy media companies were quite different than they are today, and this impairment acknowledges this. The market conditions within the traditional business are tough.”
Needless to say, stockholders didn’t react well to the announcement, and share prices tumbled some 10 percent in the aftermath. It continues a downward trend that has persisted since Warner Bros bought and merged with Discovery in April 2022; WBD share prices have collapsed by around 70 percent over the past two years.
Revenues are dropping across the Warner Bros Discovery empire. Gaming revenue has declined by 41 percent, with the disappointment of Rocksteady live-service game Suicide Squad: Kill The Justice League resulting in a $200m loss for Warner’s interactive arm. As a result, WBD has reportedly been mulling the possibility of selling off some of its assets, such as the lucrative Hogwarts IP, in order to balance the books.
The media giant had previously said it wanted to avoid breaking up the company, but that was on the 6th August – a day before its bombshell $9.1bn write-down. As for what the company will do next, Zaslav has said it has to “consider all options.”
“The number one priority,” he added, “is to run this company as effectively as possible.”
In July, WBD announced that around 1,000 employees are to lose their jobs. As the firm reacts to its latest financial crisis, we’re likely to see more grim stories like that one emerge over the coming months. David Zaslav took home a salary of $49.7m in 2023. Just thought we’d mention it.
