Warner Bros. Stock Beaten Down

By Douglas A. McIntyre Published Jul 6, 7:30AM EDT

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An article about Warner Bros. Discovery Inc. (NASDAQ: WBD | WBD Price Prediction) CEO David Zaslav was pulled from GQ. It called him the “most hated man in Hollywood.” The GQ decision set off a PR scandal. Lost in the Zaslav controversy is that Wall Street has as big a problem with Warner Bros. Discovery as the media does.
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Warner Bros. shares are down almost 10% in the past year, while the overall market is up 16%. A primary reason is that Zaslav’s attempt to repair the company is a whirlwind of decisions that appear to have little strategic purpose and are unlikely to affect financial results positively. And Warner Bros. is deeply in debt, a mistake Zaslav made when he agreed to merge Warner with Discovery. He assumed he could dig his way out of a terrible balance sheet. Investors do not think that will work. (These 19 executives pay themselves more than $150 million a year.)
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One of Zaslav’s most visible decisions was to replace CNN CEO Chris Licht. Zaslav claimed Licht would be CNN’s perfect leader. Instead, its ratings plunged.

Zaslav also recently started a new streaming service called Max. Warner Bros. and Discovery’s separate streaming services ran well behind leaders Amazon and Netflix. Zaslav never adequately described why the rebranding would work.
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Zaslav created a controversy when he removed some senior executives from the popular TCM channel. It was another sign he knew little about the consumers who watch the company’s video products and stations.
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Zaslav has moved many other key executives out of the company. It is not certain how this benefits Warner Bros.’s financial picture other than to save the money they were compensated.

If Zaslav has a vision for Warner Bros.’s future, it is muddy. And Wall Street has turned against him and his lack of a concrete plan.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.