Warner Bros. Discovery is considering splitting the company’s movie studio and Max streaming service into a standalone company to deal with the conglomerate’s massive debt and persistently sagging stock price, according to the Financial Times.
Citing unnamed sources close to the situation, the outlet reported Wednesday that the idea is one of several potential strategic options under consideration that range from simply selling assets off to turning the film and streaming business into a separate company disconnected from WBD’s $39 billion in debt.
Warner Bros. Discovery didn’t immediately respond to a request for comment from TheWrap.
The Financial Times noted that WBD hasn’t hired an investment bank to handle any kind of large scale transaction, and sources who spoke to FT said the company could simply continue operating under its current structure.
But WBD CEO David Zaslav attended the Allen & Company Conference in Sun Valley, Idaho last week, the annual gathering of powerful elites in politics, media and tech where big deals often are hatched.
The news comes a day after a leading analyst with Bank of America said the company should explore “strategic alternatives such as asset sales, restructuring and/or mergers” to right the myriad problems besetting the company under Zaslav, which was created by the merger of Discovery and Warner Bros. in 2022.
The company’s stock price as fallen by over 67% since then due to several related and unrelated factors, including declining revenues for linear television, and the 2023 double Hollywood strike. More recently, uncertainty over NBA media rights negotiations, which may result in TNT Sports losing to Amazon and NBC, has played a role.
Also on Tuesday, the company enacted another round of layoffs, though a “significantly lower” number of employees were said to be affected relative to previous cuts. Around 1,000 employees lost their jobs, mainly in production, business affairs and finance. A week earlier, WBD-owned CNN announced plans to lay off 100 staffers by the end of the year.
WBD will report its second quarter earnings Aug. 7. Bank of America predicts that WBD will report $40.2 billion in revenue and $9.67 billion in EBITDA for full year 2025 and reduced EBITDA estimates for full year 2025 and 2026 by roughly $600 million each.
WBD stock closed at $8.32 per share at the end of trading on Wednesday.
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