Warner Bros. Discovery announced its quarterly earnings — well, losses — to the tune of a $11.2 billion, with a “B,” loss:
Warner Bros. Discovery (WBD) reported second-quarter earnings after the bell on Wednesday that missed expectations on both the top and bottom lines while the company took a massive $9.1 billion impairment charge related to its TV networks unit. Including an additional $2.1 billion in costs related to its merger, the company took an $11.2 billion hit last quarter.
“It’s fair to say that even two years ago, market valuations and prevailing conditions for legacy media companies were quite different than they are today,” Warner Bros. Discovery CEO David Zaslav said on the earnings call. “This impairment acknowledges this and better aligns our carrying values with our future outlook.”
That impairment loss related to Warner’s TV networks is likely due to the ongoing death of cable and satellite TV (CSTV). In the age of streaming, those TV assets are not worth what they were even ten years ago. Millions and millions of Americans are canceling their CSTV and moving to streaming. The problem for companies like Warner Bros. Discovery is that the streaming money doesn’t come close to making up for the money lost on CST.
A “number of triggering events, including … the continued softness in the US ad market and uncertainty related to affiliate and sports rights renewals, including the NBA, required us to adjust our planning assumptions,” the company CFO explained.
The soft ad market is what happens in a faltering economy. Well, Hollywood wanted Joe Biden as president, so what we have here is Warner Bros. Discovery getting what it voted for. Boo hoo.
As I’ve been saying for 15 years now, these entertainment companies are in deep, deep trouble without the affirmative action that is CSTV. A hundred million American households paid for channels they never watched and these left-wing multinationals made billions off of those channels and all that content hardly anyone watched.
There is no making up for that loss. All that free, unearned money is gone. Go look at the stock prices of all these entertainment companies. As more people canceled their CSTV, their stock prices took a dive.
John Nolte’s first and last novel, Borrowed Time, is winning five-star raves from everyday readers. You can read an excerpt here and an in-depth review here. Also available in hardcover and on Kindle and Audiobook.
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