$10 Billion Loss for Warner Bros. Discovery

Warner Bros. Discovery posted a net loss of just under $10 billion in the second quarter after taking a $9.1 billion impairment charge related to its TV networks business.

The impairment charge follows the company losing a key package of NBA matches and comes amid a soft U.S. linear ad market. Revenues at the company in Q2 fell by 5 percent ex-FX to $9.7 billion.

“At Warner Bros. Discovery, our top priority is our global direct-to-consumer business, and we are extremely pleased with the growing momentum we are seeing, as demonstrated by another strong quarter of growth with 3.6 million net adds, fueled by our ongoing international expansion and investment in high quality, diverse content,” said David Zaslav, president and CEO. In light of industry headwinds, we have and will continue taking bold steps, like reimagining our existing linear partnerships and pursuing new bundling opportunities, with the goal to get Max on the devices of more consumers faster and at a fraction of the acquisition cost, and we are seeing clear evidence that these and other actions we are taking will help drive segment profitability in the second half of the year and into 2025 and beyond.”

The studios segment reported revenues of $2.4 billion, a decline of 4 percent ex-FX, with content revenues slipping 6 percent to $2.2 billion. Television revenues were down 27 percent and gaming down 41 percent, while theatrical increased 19 percent.

Networks revenues in Q2 were $5.3 billion, an 8 percent fall ex-FX, with distribution down 8 percent amid further contraction in the U.S. pay-TV market and advertising down 9 percent. Content revenues were up 5 percent.

The direct-to-consumer business delivered revenues of $2.6 billion, a 5 percent reduction. The segment, which reached 103.3 million DTC subs, saw a 1 percent increase in distribution revenues and a doubling of ad revenues, while content revenues dropped by 70 percent due to a lower volume of third-party licensing.