Warner Bros. Discovery Announced Quarterly profit (or loss, to be precise) was $11.2 billion, giving it a “B” loss.
Warner Bros. Discovery (WBD) reported second-quarter earnings after the close on Wednesday that missed expectations on both revenue and profit and took a huge $9.1 billion impairment charge related to its television networks division. Including an additional $2.1 billion in merger-related charges, the company lost $11.2 billion last quarter.
“It’s fair to say that even two years ago, market valuations and the real world outlook for legacy media companies was quite different than it is today,” Warner Bros. Discovery CEO David Zaslav said on the earnings conference call. “Today’s impairment is a recognition of this and brings our carrying value more in line with our future outlook.”
The impairment charges related to Warner’s TV networks are likely due to the ongoing decline of cable and satellite television (CSTV). In the streaming era, these TV assets are worth less than they were a decade ago. Millions of Americans are cutting their CSTV subscriptions and moving to streaming. The problem for a company like Warner Bros. Discovery is that streaming revenue doesn’t come close to making up for the revenue lost to CST.
“Several triggering events, including continued weakness in the U.S. advertising market and uncertainty regarding rights renewals for affiliates and sports, including the NBA, required us to adjust our planning assumptions,” the company’s CFO explained.
A downturn in the advertising market is what happens when the economy is down. Hollywood wanted Joe Biden for president, so Warner Bros. Discovery voted for him. Too bad.
As I have been saying for 15 years, these entertainment companies would be in very serious trouble without affirmative action like CSTV. 100 million American households pay for channels they never watch, while these left-wing multinational corporations make billions of dollars from those channels and content that almost no one watches.
You can’t make up for that loss. All that free money is gone. Look at the stock prices of these entertainment companies. As more and more people cancel their cable TV subscriptions, their stock prices plummet.
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