Warner Bros Discovery (WBD) is strategizing to prevent a potential break-up amid plummeting stock prices. Since its formation in 2022, the company’s share value has dropped nearly 70%, prompting CEO David Zaslav and CFO Gunnar Wiedenfels to explore various options to stabilize the business.
Despite initial considerations for a corporate split to separate its television channels from its streaming and studio operations, WBD’s management has determined that such a move would present significant operational and legal hurdles. The complexity of managing sports rights, content distribution, and potential legal challenges made the break-up option less viable.
Instead, WBD is focusing on selling smaller assets to generate capital. The company is evaluating offers for Polish broadcaster TVN and a stake in its lucrative video games business, which includes intellectual property for popular franchises like Harry Potter. The aim is to reassure investors and improve the company’s market valuation, which currently lags significantly behind its perceived worth of $60 billion.
The company, formed from the merger of Discovery and WarnerMedia, has struggled to meet Wall Street expectations amid a fierce streaming competition with Netflix and Disney. WBD has already implemented cost-cutting measures, including layoffs and asset sales, but the market remains challenging.
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