The merger between AT&T’s media properties, including Warner Bros., and smaller Discovery, is now officially a failure. Warner Bros. Discovery Inc. (NASDAQ: WBD) shares hit an all-time low two years after the transaction in April 2022. Much-criticized CEO David Zaslav had a magic touch at Discovery. That is entirely wrong.
The last chapter of the catastrophe is that the company could lose its deal with the NBA. News of this tanked the stock 10%. It is off 58% over the past two years, while the S&P 500 is 21% higher. NBCUniversal may get the NBA relationship, after the sport’s long-time relationship with Warner Bros. Discovery’s TNT network.
The NBA is only one nail in the company’s coffin. Last year, Warner Bros. Discovery’s revenue fell 7% to $10.3 billion. The company lost $400 million after a $2.1 billion loss in 2022.
The actor’s strike helped push content revenue down 19% to $2.9 billion in 2023. As people dropped their pay-TV subscriptions, it hurt Warner Bros. Discovery’s network revenue, which fell 9% to $5.0 billion. The worst news was from the direct-to-consumer segment, which includes streaming business Max. Revenue from what should be the fastest-growing business was up only 3% to $2.5 billion. (See how the most popular TV networks according to baby boomers rank.)
What’s wrong with the merger that created Warner Bros. Discovery is that nothing has gone right. Zaslav presented the deal as the future of large media companies and one that competes with other giants like Disney. The price of the stock, which posted an all-time low of $7.34, shows that the promise was never kept.
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