August 13, 2022
Warner Bros.  Discovery loses earnings, shares fall 10% in after-hours trading

Warner Bros. Discovery posted weaker-than-expected second-quarter earnings on Thursday and announced that the merger of two of its most popular streaming services would be complete by next summer.

The media reported its earnings for the first time since the merger to combine the properties of Discovery and WarnerMedia – which include HBO, CNN, Warner Bros., HGTV and TLC.

Shares were down nearly 10% in after-hours trading.

WBD CEO David Zaslav has come under criticism for his cost-cutting decisions since the merger – including scrapping the already completed “Batgirl” film.

He said HBO Max and Discovery+ will be merged next summer.

“We’ve had a busy, productive four months since launching Warner Bros. Discovery, and have more conviction than ever in the big opportunity ahead,” Zaslav said. “We believe we are on the right track to deliver on our strategic goals and excel truly creatively and financially, and could not be more excited about the future of our company.”

Screen shot of the Discovery+ show
Zaslav said the company will merge streaming services Discovery+ and HBO Max.

During the quarter, the media giant reported a net loss of $3.42 billion, or $1.50 per share. Losses included more than $2 billion in amortization of intangible items, as well as $1 billion in restructuring and other charges, as well as nearly $1 billion in transaction/integration costs.

Total revenue was $9.83 billion. Wall Street expects a net loss of 3 cents on revenue of $11.84 billion.

The company said that its streaming subscriber base, which includes both Discovery+ and HBO Max, totals 92.1 million.

Screen shot of HBO Max app
HBO Max together with Discovery+ achieved 92.1 million subscribers in the second quarter.

WarnerMedia reported 76.8 million subscribers to HBO or HBO Max last quarter, with Discovery reporting 24 million, but those reports used an older definition of what a subscriber is, the company said.

The company said the new numbers do not include “10 million legacy Discovery non-core subscribers and inactive AT&T Mobility subscribers from the Q1 subscriber count.”

WBD said that using its new definition of direct-to-consumer subscribers, the company added 1.7 million subscribers from Q1 to Q2.

Earlier this week, the media type discussed that Zaslav would soon offer details that would help the company reach $3 billion in 2023.

Investors got a glimpse at Zaslav’s plan on Tuesday, when the media giant announced that it would be making its direct-to-streaming DC flick starring “In the Heights” star Leslie Grace as well as “Scoob!: Holiday Hunt.” Shelter to “Batgirl”.

Cutting both films saves WBD significantly on marketing costs and any back-end payments.

A still from Leslie Grace as Bat Girl
Leslie Grace’s “Batgirl” went on the shelf, causing a stir among media critics.
Twitter/Leslie Grace

There have also been rumors that the merger of two of the firm’s biggest streaming services, HBO Max and Discovery+, will result in some damage. Hollywood Trade on Wednesday Wrap reported That the company plans to sort out 70% of its development business.

Since the $43 billion merger of Discovery and WarnerMedia closed, life has fallen apart at the newly formed WBD. Zaslav’s no-nonsense, budget-focused leadership has translated into more than a few rip-the-band-aid-decisions. Shortly after the deal closed, the CEO closed CNN’s months-old $300 million streaming service, CNN+.

“We will obviously take swift and decisive action on some items, as you saw on CNN+ last week,” Zaslav told investors on an earnings call in April, vowing not to “overspend.”

Chris Lich
CNN boss Chris Licht has been tasked with boosting revenue and ratings.
Getty Images

Zaslav soon brought on Chris Licht, a former executive producer on “The Late Show with Stephen Colbert,” to replace former CNN chief executive Jeff Zucker, who resigned. Top executives have focused on building CNN’s weak ratings by reorienting fact-based journalism from opinion-based reporting.

Licht is currently scrambling to raise the cost and buffer ratings, while looking for ways to increase new revenue streams as the network’s profits reportedly fall below the $1 billion mark for the first time since 2016. is about to fall.

Leave a Reply

Your email address will not be published.