Warner Bros. Discovery Faces Severe Stock Drop Amid Rapid Decline in Television Business

Warner Bros. Discovery (WBD) is facing increasing financial pressure as its stock took a sharp 10% hit, plummeting to a new low of $6.90 following a dismal second-quarter earnings report. The steep decline comes on the heels of a massive $9.1 billion write-down on the company’s network assets, signalling the rapid deterioration of the traditional television industry, which has long been a cornerstone of WBD’s revenue.

The company, which owns well-known cable channels such as CNN, HGTV, TNT, and TBS, is struggling as cord-cutting continues to erode viewership and household reach. This decline in linear television has been further exacerbated by WBD’s recent public fallout with the NBA, a longstanding partner after WBD attempted to match Amazon’s $1.8 billion per year bid for NBA games. The ensuing legal battle has only added to the company’s woes, with WBD acknowledging that losing the NBA games starting from the 2025-26 season will have significant financial repercussions.

“The goodwill impairment 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,” WBD stated in its financial summary.

WBD is not alone in facing these challenges; other legacy media giants like Paramount Global have also struggled to adapt to the rapidly changing media landscape dominated by streaming services. Paramount, which recently merged with David Ellison’s Skydance, has seen its value drop by 27% this year.

In a candid discussion during the earnings call, WBD CEO David Zaslav acknowledged the harsh realities of the television business, noting that market conditions have drastically shifted in just the last two years. While he highlighted the success of WBD’s streaming platform, Max, Zaslav was frank about the “tough conditions” facing the company’s legacy business.

The dire financial situation has sparked speculation that WBD may be forced to sell off some of its assets. Chief Financial Officer Gunnar Wiedenfels indicated that the company is actively exploring strategic options, including mergers and acquisitions, though WBD has so far shown reluctance to part with any major assets.

Whether WBD can navigate its way out of this precarious position without significant asset sales remains uncertain, as the company grapples with the challenges posed by a rapidly evolving media landscape.