BMA has learnt that Warner Bros Discovery’s leadership is working diligently to address the significant decline in the company’s stock price since its formation in 2022.
CEO David Zaslav and CFO Gunnar Wiedenfels have explored various options to reverse this trend. The prospect of splitting the company’s declining television channels from its streaming and studio business was considered but was ultimately deemed impractical due to operational challenges and potential legal hurdles.
Instead of pursuing a corporate breakup, Zaslav and Wiedenfels are considering divesting smaller assets such as Polish broadcaster TVN and a stake in Warner’s video games business. They believe that these actions, coupled with the company’s ongoing efforts to cut costs, pay off debt, and sell non-core assets, will help improve the company’s financial standing.
Despite the challenging market conditions, WBD’s management remains optimistic about the company’s true market capitalization, which they estimate to be around US$60 billion. They are focused on delivering value to investors and steering the company towards a turnaround.
The company’s recent focus on cost-cutting and debt reduction, alongside the divestment of assets such as All3Media, reflects its efforts to adapt to the evolving media landscape. However, the strategic importance and tax implications of potential divestments, particularly CNN, pose significant considerations for the company.
While WBD management acknowledges the current market challenges, they are determined to enhance the company’s value and remain confident in its long-term prospects, despite the hurdles they may face.
