Warner Bros. Discovery reported its second-quarter 2024 earnings Wednesday, which included a $9.1 billion charge related to the devaluation of the companies TV networks, and an overall $11.2 billion hit to the company’s balance sheet.
The $9.1 billion goodwill impairment charge, which is a non-cash, pre-tax figure, comes after an asset reevaluation that accounted for the difference between the “fair value” and “book value” of the networks, which have changed due to continued softness in U.S. linear ad market and uncertainty around affiliate and sports rights renewals, including the NBA, two years after the close of WarnerMedia and Discovery’s merger.
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These linear networks include Food Network, HGTV, Discovery, CNN, TNT, TBS and Cartoon Network/Adult Swim, among others.
Elsewhere in the quarterly results, the David Zaslav-led company reported a loss of $107 million for its direct-to-consumer segment in Q2.
But there was some good news for its streaming business: The April 1-June 30 period concluded with WBD’s HBO, Max and Discovery+ boasting a total of 103.3 million global subscribers following an addition of 3.6 million during the quarter. Warner Bros. Discovery attributed a large portion of that growth to the international relaunches of Max (the combined and rebranded HBO Max-Discovery+ streamer, which debuted in the U.S. last spring).
Warner Bros. Discovery also says it had significant year-over-year ad revenue growth in streaming.
“At Warner Bros. Discovery, our top priority is our global direct-to-consumer business and we are extremely pleased with the growing momentum we are seeing, as demonstrated by another strong quarter of growth with 3.6 million net adds, fueled by our ongoing international expansion and investment in high quality, diverse content,” Zaslav said in a letter to shareholders. “In light of industry headwinds, we have and will continue taking bold steps, like reimagining our existing linear partnerships and pursuing new bundling opportunities, with the goal to get Max on the devices of more consumers faster and at a fraction of the acquisition cost, and we are seeing clear evidence that these and other actions we are taking will help drive segment profitability in the second half of the year and into 2025 and beyond.”
More to come…
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