David Zaslav Credit: Liam McGuire

David Zaslav’s no-good, very bad year keeps getting worse. Drastically so.

The Warner Bros. Discovery CEO said goodbye to NBA media rights last month (something he and WBD are still fighting). Turns out, that was just the tip of the iceberg when it came to their losses.

WBD announced its second-quarter 2024 earnings Wednesday, which included a $9.1 billion impairment charge stemming from a reevaluation of their TV networks’s value as audiences and advertisers leave in droves for streaming services.

Coupled with an additional $2.1 billion in costs related to the merger between WarnerMedia and Discovery, they had a grand total of $11.2 billion in losses on their balance sheet 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,” Zaslav said on the earnings call. “This impairment acknowledges this and better aligns our carrying values with our future outlook.”

WBD CFO Gunnar Wiedenfels noted that the second quarter included a “number of triggering events, including the difference between our current market cap and the book value of the company, the continued softness in the US ad market, and uncertainty related to affiliate and sports rights renewals required us to adjust our planning assumptions.

“While I am certainly not dismissive of the magnitude of this impairment, I believe it’s equally important to recognize that the flip side of this reflects the value shift across business models and our conviction and confidence in the growth and value opportunity across studios and our global direct to consumer business.”

While Max provided a bright spot for the company, garnering 3.6 million new subscribers and bringing its total streaming customers to 103.3 million, revenue for their TV networks portfolio, which includes TBS, TNT, Discovery, Food Network, HGTV, and TLC,  was down 8%.

The fact that WBD and TNT Sports will lose NBA coverage after next season certainly isn’t going to instill a lot of faith in investors that those kinds of numbers will be reversible, at least for those channels.

Based on that news, WBD shares dropped about 9% in after-hours trading, going as low as $7.10 per share. That barely beats out the stock’s lowest price, $6.99 per share, which happened on June 18, 2024. On the year, WBD stock is down 34%.

The company’s market capitalization now stands at around $18.8 billion, down from over $50 billion following the merger in April 2022.

A lot has changed since Zaslav said publically that “we don’t have to have the NBA.” WBD has bigger problems than just that, but he’s probably regretting that own goal a little bit more today than he did yesterday.

At least they’re keeping Charles Barkley around

[Yahoo Finance, CNBC, Variety]

About Sean Keeley

Along with writing for Awful Announcing and The Comeback, Sean is the Editorial Strategy Director for Comeback Media. Previously, he created the Syracuse blog Troy Nunes Is An Absolute Magician and wrote 'How To Grow An Orange: The Right Way to Brainwash Your Child Into Rooting for Syracuse.' He has also written non-Syracuse-related things for SB Nation, Curbed, and other outlets. He currently lives in Seattle where he is complaining about bagels. Send tips/comments/complaints to sean@thecomeback.com.