Warner Bros. Discovery (WBD) clearly has Wile E. Coyote in its DNA: Its stock price fell off a cliff with a resounding kersplat yesterday, largely due to its struggles with legacy TV. Shares plummeted 12% intraday upon the news that the company registered an impairment charge of $9.1 billion in Q2.
Translation, please? The accounting move acknowledges that the market value of WBD’s traditional TV properties is significantly less than the books showed, hence the correction. The anticipated removal of NBA games from TNT, one of WBD’s networks, following the 2025 season likely contributed to the write-down of its linear TV assets.
Run it back: WBD CEO David Zaslav was the long-time CEO of Discovery who oversaw the merger with WarnerMedia and then took the lead of WBD. He hoped the merged company would allow both brands, heavily dependent on linear TV, to stick the landing into the streaming era. In theory, the combined content catalog would supercharge subscription numbers and save money through cost synergies.
But TV networks are stuck in a liminal space. They’re on the way down, but the ones people still reliably watch—such as cable news and pro sports—command large fees from providers like Comcast and Verizon. This disparity “makes them hard to do anything with, one way or another,” Business Insider said. Paramount, which owns CBS, MTV, and Nickelodeon, wrote down the value of its legacy TV assets by $6 billion this week.
Where does it go from here? One brave analyst said that WBD’s problems are “unlikely” to get worse. Zaslav thinks he can buy his way out of the problem by making further acquisitions, but only if the next US president cools it with the antitrust enforcement.
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