Media conglomerate Warner Bros Discovery Inc (NASDAQ:WBD, ETR:J5A) dropped almost 11% in aftermarket trading in the US after a zinger of a quarterly update, which contained a $9.1 billion writedown of the value of its TV networks.
The company, formed by the 2022 merger of Discovery Inc. and WarnerMedia, adjusted the valuation of cable channels such ass CNN and TNT to reflect changing market conditions since the $42 billion merger. CEO David Zaslav stated this adjustment aligns with the declines expected across traditional media.
The move also followed the NBA's decision to end its broadcast deal with Warner Bros. and partner with Disney, Comcast, and Amazon. Warner Bros. sued the NBA for breach of contract.
Despite this, Warner Bros. added 3.6 million streaming subscribers, surpassing expectations, with ad revenue doubling to $240 million. The company also reported a Q2 net loss of $10 billion, including $2.1 billion in merger-related charges, and a 6.2% revenue decline to $9.71 billion.