Warner Bros. Discovery boss David Zaslav has become a despised figure in Hollywood, largely because of his decision to write off nearly completed films as tax write-offs (Batgirl And Coyote vs Acme remain the two most notable examples).
The seemingly endless changes to HBO Max, now called Max, were also unpopular, and attempts to cut costs only served to alienate creatives and executives alike.
The impact of Zaslav’s disastrous leadership is being felt keenly this week, with Warner Bros. Discovery shares plunging 11% to an all-time low yesterday. This came after the company was forced to take a massive $9.1 billion writedown reflecting the decline in value of several of its linear television networks.
Shares have fallen to as low as $6.86 per share; for comparison, when Zaslav took the job in 2022, they traded at $24.78 per share and had fallen to $14.76 this time last year. Warner Bros. Discovery’s market cap is now $18.8 billion, down from over $50 million after Discovery acquired WarnerMedia in April 2022.
The merger did not work out, although the company blames this recent valuation on the “Difference between market capitalization and book value” due to a weak US advertising market and “Uncertainty” regarding future transport contracts.
One of their biggest problems is the loss of the NBA. Zaslav’s response was to sue the NBA to keep the rights. He claimed that Warner Bros. Discovery made the same offer as Amazon, giving WBD the right of first refusal.
Max, HBO and Discovery+ added 3.6 million subscribers last quarter and now have a total of 103.3 million subscriptions, but direct-to-consumer offerings still suffered a loss of $107 million.
Warner Bros. Discovery is apparently exploring the possibility of separating its film, television and streaming studios from its linear TV channels, largely because the latter is $40 billion in debt. However, many analysts believe this attempt to unlock more value will fail.
In July, the company cut another 1,000 jobs; Zaslav reportedly earned $49.7 million last year.
“At Warner Bros. Discovery, our global direct-to-consumer business is our highest priority and we are extremely pleased with the growing momentum we are seeing. This is also reflected in another strong growth quarter with 3.6 million net additions, driven by our continued international expansion and investment in high-quality, diverse content,” Zaslav said in a statement yesterday.
“In the face of industry headwinds, we have taken and will continue to take bold steps, such as re-imagining our existing linear partnerships and pursuing new bundling opportunities, with the goal of bringing Max to more consumers’ devices faster and at a fraction of the acquisition cost. And we see clear signs 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.”
Stay tuned for updates.