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Warner Bros. Discovery’s failure to secure a renewal with the NBA has already begun to have a disruptive impact on operations, as the company today disclosed that it has taken written down the value of its TV assets to the tune of a massive $9.1 billion goodwill charge.
According to WBD’s second quarter earnings statement, the write-down was “triggered in response to the difference between market capitalization and book value, continued softness in the U.S. linear advertising market, and uncertainty related to affiliate and sports rights renewals, including the NBA.”
Speaking to investors during the company’s afternoon presentation to investors and analysts, CEO David Zaslav acknowledged that the cable networks unit is in a bit of a pickle. “It’s fair to say that even two years ago, market valuations and prevailing conditions for legacy media companies were quite different than they are today,” Zaslav said in his opening remarks. “This impairment acknowledges this and better aligns our carrying values with our future outlook.”
“There is no one factor that is driving this impairment,” WBD chief financial officer Gunnar Wiedenfels said, before adding that the “discussion” around the NBA rights had “come into play as a triggering event.” Wiedenfels went on to characterize the move as a “full reevaluation” of the value of the networks, “not a response to one individual factor.”
WBD is suing the NBA in a bid to retain at least some part of its longstanding association with the league. A judge has given the NBA until August 23 to respond to the complaint; if they move to dismiss—and this would appear to be the most credible option—WBD has until Sept. 20 to return serve. The NBA would then have until Oct. 2 to deliver a subsequent response to that response.
While the WBD execs mostly steered clear of addressing the active legal proceedings, Wiedenfels allowed that the NBA “is a profitable right.” Analysts estimate that some $600 million in annual profits would evaporate once WBD embarks upon its post-NBA future; all told, the live games and studio programming are estimated…
Source link : https://finance.yahoo.com/news/wbd-takes-9-1b-impairment-230718660.html
Author : Sportico
Publish date : 2024-08-07 23:07:18
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