Warner Bros. Discovery Sees $2.1 Billion Loss in Q4 After Big Writedown; Ad Sales Tumble
variety.comSubmitted by Neo2199 t3_11a9aao in television
pm_me_reason_to_livx t1_j9qo8dx wrote
billion? geesh. i thought their whole plan was to be profitable.
NO_FIX_AUTOCORRECT t1_j9ucufi wrote
I'm not a business person but i would think you'd lose money as an immediate result of restructuring but hope to make more in the long term because of it.
addictedtolols t1_j9ra8b1 wrote
the streaming gold rush showed that none of them can beat netflix. in 3 years most of them will close up shop and go back to producing tv shows for netflix and making a few movies for theaters. i wont be surprised if disney shuts down disney+
Coz91 t1_j9rdy4f wrote
Is Disney+ losing a lot as well?
Radulno t1_j9ss63m wrote
Yeah a few billions per quarter too.
f_d t1_j9rxml4 wrote
They are, but I don't know how it compares with their long-term plans. Unlike Warner, they can afford to keep spending to overtake Netflix.
>Disney’s direct-to-consumer division, which also includes Hulu and ESPN+, on Tuesday reported an operating loss of nearly $1.5 billion, more than doubling its loss of $630 million during the same quarter a year earlier.
goliathfasa t1_j9sltlj wrote
Uhhhh why the downloadsvotes? It’s literally the truth.
yeroii t1_j9strof wrote
Because it goes against the hive mind.
SeanOuttaCompton t1_j9tfy7m wrote
You’re delusional if you think Netflix is surviving too
LovingTurtle69 t1_j9tsnat wrote
Netflix profited 4.5 billion in 2022. They are doing just fine.
GarlVinland4Astrea t1_j9tmff3 wrote
Netflix is profitable. Everyone else is wondering how much money they can justify throwing into a black hole and hoping other streamers die off to give them a boost. Netflix doesn't need that
WR810 t1_j9w2b15 wrote
Do you think Netflix is going bankrupt?
dragonmp93 t1_j9ri4ja wrote
Zazlav caused WBD a $50 billion debt.
petepro t1_j9rmm46 wrote
No, what nonsense.
vitorgrs t1_j9rw5f6 wrote
not 50 billion, but yes, 30bi. Discovery didn't had the money to buy Warner, he made 30 billion debt in discovery to acquire 30% of Warner... And months later the company loose most of the value, and he could basically buy 100% of warner with that old money lol
petepro t1_j9rwwxl wrote
No, AT&T is going put its debt into WB regardless.
Radulno t1_j9ss9js wrote
Not if they didn't have an offer. That debt is basically to add to the price Zaslav was just a big enough sucker to accept to buy at that price. Even companies which could stomach that debt like Apple just said no
petepro t1_j9ssnrs wrote
AT&T plan to spin off WB and offload some of their debt into it way before any offer.
vitorgrs t1_j9rxzi8 wrote
I'm putting a fact here: "Discovery on Wednesday priced $30 billion in senior unsecured notes in a debt offering to raise cash for its merger with WarneMedia."
https://deadline.com/2022/03/discovery-debt-sale-warnermedia-merger-att-1234974970/
WR810 t1_j9rxntm wrote
AT&T was deep in debt and that's a major reason they sold Warner Brothers.
The debt wasn't new, it just has a new owner.
vitorgrs t1_j9ryh7i wrote
Never said the their entire debt was new. Just saying Discovery indeed create a 30bi+ debt to acquire Warner. It's a fact.
https://deadline.com/2022/03/discovery-debt-sale-warnermedia-merger-att-1234974970/
The thing was, we don't really know how much WarnerMedia division had in debt prior to the sale because it was unified with AT&T.
WR810 t1_j9rz4xz wrote
Obviously new debt was created to pay off the old debt.
The point was Warner Brothers and its properties have been mismanaged well before Discovery and was a major albatross around AT&T's neck. We would see reductions like this even if Discovery hadn't borrowed the money to buy Warner Brothers because the last owner was also indebted.
vitorgrs t1_j9rzsi4 wrote
Obviously that would happen a with every new sale/merger, the new owner usually try to cut costs and do "synergy cuts".
But if the new owner didn't had enough money in cash to buy the company, obviously the problem with debt get's bigger, as now you need to make the new company profitable to pay it's own debts, and to pay the debts that it made to buy it.
WR810 t1_j9s06l1 wrote
AT&T already wasn't profitable with Warner Brothers.
vitorgrs t1_j9s203n wrote
Yes, and I never said otherwise... Read again.
WR810 t1_j9sabtx wrote
>Read again.
What you did say was "you now need to make the new company profitable" as if Warner Brothers' mismanagement were substitutable. If Discovery hadn't purchased Warner Brothers then AT&T would have had to make similar cuts at some point.
vitorgrs t1_j9safz1 wrote
Again, I never said they wouldn't need that. I'm saying Discovery created a even BIGGER problem, because they literally created 30bi more in debt. It's that simple actually.
WR810 t1_j9sbqo7 wrote
>It's that simple actually.
Again, I'm telling you that it's not.
Discovery didn't create billions in debt. That debt existed on a AT&T balance sheet from well before the merger. Discovery just moved that debt from AT&T's balance sheet to their balance sheet in return for Warner Brothers (basically). The liabilities attached to Warner Brothers were nothing new.
As per my second comment we would see cuts and reductions in Warner Brothers if AT&T sold or not because AT&T was in debt and because AT&T mismanaged Warner Brothers.
GarlVinland4Astrea t1_j9tmuq0 wrote
What you are missing that others are pointing out is that WB was in such bad shape that it didn't matter if Discovery was involved.
- If it stays with AT&T it's such a big loss that they start similar cutdowns.
- If they find a non Discovery buyer, AT&T are folding debt into the sale and the buyer would assume that and still have to make cut downs.
There was no third option where WB doesn't have significant debt and doesn't need a massive overhaul. As others have said, companies that could have taken on the debt, didn't want it. It was just mismanaged for years. When everybody loved HBO Max, they were basically burning money as fast as they could and everyone knew it.
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