Warner Bros. Discovery Takes Massive $11.2 Billion In Write-Downs & Charges In Q2 After Losing NBA

deadline.com:

Warner Bros. Discovery is taking a hefty non-cash impairment charge, or write-down, of $9 billion at its networks division to align the book value of its linear television business with the reality of uncertain advertising and sports rights renewals as the NBA is set to move on.

The value of the linear assets when Discovery and Warner Media merged two and half year ago was significantly higher that it is now as consumers migrated and advertising dipped.

That’s across the industry. A difference with David Zaslav-led WBD versus other big media companies is that it just lost a lucrative basketball package Amazon.

WBD had matching rights and is suing the NBA to get the games back, but no one seems to think it can prevail. Zaslav had indicated early in the renewal process that the company didn’t absolutely need the NBA, but the lawsuit calls the loss a massive blow, which can’t make investors feel great. “The goodwill impairment was triggered in response to the difference between market capitalization and book value, continued softness in the U.S.