Warner Bros Discovery (WBD) is facing mounting pressure from investors after announcing a $11.2 billion writedown following the loss of NBA rights to rival Amazon. The company has launched a legal action to reclaim the basketball rights, but industry experts express little optimism about its success.
The news caused a significant stock market decline for WBD, with the company losing 11% of its market value on Wednesday. This follows a 34% drop in stock price year-to-date. In response to investor concerns, WBD is now exploring asset sales as a means to restore confidence.
"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," said David Zaslav, CEO of WBD, in a statement.
Despite the financial woes, WBD reported Q2 revenue of $9.7 billion, a 5% decrease compared to the same period in 2022. However, the company recorded a $10 million loss, including the impairment charge.
A positive development for the company was the growth of its direct-to-consumer services, which include Discovery+, HBO Max, and Max depending on the region. These platforms saw a 3.6 million subscriber increase following the rollout of Max in Europe.