All Options on the Table as WBD Seeks to Prevent Total Breakup
Perhaps it was always too big to swallow, but now CEO David Zaslav appears to have made plans to restructure, downsize, or sell off parts of the WarnerBros. Discovery (WBD) media powerhouse.
Consultants have been called in to advise the beleaguered WBD executive team while analysts have gone public with their thoughts on what amounts to a failed merger.
“In our view, the current composition as a consolidated public company is not working,” Bank of America Global Research analyst Jessica Reif Erlich said, in a note to clients, as quoted in Deadline.
The company’s stock has declined more than 70% to $20 billion since Discovery acquired Warner Media in early 2022. “At current levels, we believe exploring strategic options for WBD would create more shareholder value vs. the status quo,” added Erlich. “All options need to be on the table.”
The main option being explored seems to be to separate the conglom’s streaming service Max and content studio from the linear TV business. The aim would seem to be to free the streaming arm which is earmarked as the future of the company, from the shackles of a $40 million debt burden.
That debt would apparently be locked to the linear division which includes CNN, HBO, TNT, Discovery Channel, as well as Eurosport and TNT Sports in the UK. That said, TNT may lose out to Amazon in bidding for the next decade of NBA rights. If that happens the future of TNT would be on the block. Also on the table is a straight divestment of some assets.
A clean move might be to hive off the sports related properties like Eurosport and TNT, which own prized rights such as the Olympics and Champions League football in Europe. But with live sports considered by many analysts to be an evergreen asset vital for media company survival, this would seem dramatic. WBD has been on a mission to slash debt and move back into profit since the $43bn merger. It has made repeated rounds of redundancies with the latest cull of 1000 jobs only happening this week.
The news broke in a report in the FT, which also suggested WBD is considering possible merger & acquisition options for some of its assets.
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