Warner Bros. Discovery CEO David Zaslav has become a despised figure in Hollywood, largely due to his decision to scrap near-completed films as tax write-offs (Batgirl and Coyote vs. Acme remain the two most noteworthy examples).
The seemingly endless changes made to HBO Max, now called Max, have also been unpopular and attempted cost-cutting measures only served to alienate creatives and executives alike.
The impact of Zaslav's disastrous leadership is being felt fully this week after Warner Bros. Discovery stock slid 11% yesterday to an all-time low. This came after the company was forced to record a massive $9.1 billion write-down reflecting the loss of value of several of its linear television networks.
Shares have fallen to as low as $6.86 per share; for context, they were trading at $24.78 per share when Zaslav started the job in 2022 and had dropped to $14.76 this time last year. Warner Bros. Discovery's market capitalization now stands at $18.8 billion compared to over $50 million following Discovery's acquisition of WarnerMedia in April 2022.
The merger hasn't worked out, though the company blames this latest valuation on the "difference between market capitalization and book value" due to a weak U.S. advertising market and "uncertainty" surrounding future carriage deals.
Among their biggest issues is the loss of the NBA. Zaslav's response to that has been to try and sue the NBA in a bid to retain the rights, claiming Warner Bros. Discovery matched Amazon's offer for them, thereby giving WBD first dibs.
Max, HBO, and Discovery+ did add 3.6 million subscribers in the latest quarter for a total of 103.3 million subscriptions, though its direct-to-consumer offerings still suffered a $107 million loss.
Warner Bros. Discovery is thought to be exploring the possibility of separating its film, TV, and streaming studios from linear TV channels, primarily because $40 billion in debt lies with the latter. However, many analysts believe this attempt to unlock more value will fail.
In July, the company cut another 1000 jobs; Zaslav, meanwhile, earned a reported $49.7 million last year.
"At Warner Bros. Discovery, our top priority is our global direct-to-consumer business and we are extremely pleased with the growing momentum we are seeing, as demonstrated by another strong quarter of growth with 3.6 million net adds, fueled by our ongoing international expansion and investment in high quality, diverse content," Zaslav said in a statement yesterday.
"In light of industry headwinds, we have and will continue taking bold steps, like reimagining our existing linear partnerships and pursuing new bundling opportunities, with the goal to get Max on the devices of more consumers faster and at a fraction of the acquisition cost, and we are seeing clear evidence 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.