Warner Bros Discovery writes down value of TV networks by $9.1bn

The film and TV studio recorded a $9.1bn non-cash goodwill charge in the second quarter, stemming from a reassessment of its TV assets’ value since the merger of WarnerMedia and Discovery.

The write-down led Warner Bros Discovery to report a quarterly net loss of $10bn, which compared to Wall Street’s expectations of a $542m loss and exceeded its total revenue of $9.7bn.

The media landscape has significantly changed in the past two years, impacting valuations and expectations for traditional media companies, CEO David Zaslav said in a call with analysts.

The move away from traditional television to streaming services has led to a decline in advertising revenue and affiliate fees.

Last month, TNT lost out on a broadcast deal to air National Basketball Association (NBA) games, at a time when live sports have become crucial for companies to increase viewership. Disney, Amazon and Comcast acquired the rights for $77bn.

However, the company’s direct-to-consumer customer base grew in the second quarter as a result of cheaper ad-supported offerings and the expansion of the Max streaming service to new markets.

Global direct-to-consumer subscribers at the end of the quarter were 103.3m, up from 99.6m subscribers in the January-March period.

Zaslav said: “Our top priority is our global direct-to-consumer business and we are extremely pleased with the growing momentum we are seeing.” IBC365