Warner Bros. Discovery just learned that its television networks are worth $9. 1 billion less than it initially thought, resulting in a net loss of $10 billion in the second quarter of 2024.
The large drop in valuation is accounted for as a “non-cash goodwill impairment charge” that originates primarily from the company’s “Networks” segment. This will have to have been a revealing internal audit.
Warner Bros. Discovery just lost its rights to broadcast the NBA starting next season, and the company is suing the NBA to keep the rights, claiming that it matched Amazon’s bid for the NBA and that the NBA couldn’t do so. legally. They do match.
This is a big slice of the pie, but it’s the only thing leading to this sharp loss in value, as the decline in advertising for their linear networks has taken its toll on all Discovery Channels and Turner Cable Channels.
WBD also reported an amortization of $2. 1 billion “of pre-tax amortization of intangible assets related to acquisitions, fair price increase of contents, and restructuring expenses. “
The news is that streaming has rebounded, with all of its DTC offerings between Max, HBO and Discovery adding 3. 6 million subscribers in the quarter for a total of 103. 3 million subscribers. However, the direct-to-consumer segment recorded a loss of $107 million.
Late last month, a report was released that Warner Bros. Discovery was reading a potential spin-off of its film and TV studio and streaming it from its linear TV channels. Much of WBD’s $40 billion in debt is based on linear channels, so a divorce would be lost. the study segment to unlock more value, but it also carries major risks, and some analysts absolutely doubt this.
The company cut thousands of other jobs in July, mainly in the finance, advertising and production divisions.