As the media conglomerate published earnings figures for the fourth quarter on Thursday that were below expectations across the board, the CEO of Warner Bros. Discovery (WBD), David Zaslav, declared that 2023 will be WBD’s year.
As the media conglomerate published earnings figures for the fourth quarter on Thursday that were below expectations across the board, the CEO of Warner Bros. Discovery (WBD), David Zaslav, declared that 2023 will be WBD’s year.
On the fourth-quarter earnings call for the company, he shared with the investors that “this promises to be a really exciting year for our company.” “The majority of our restructuring is now complete…we are operating as a single firm.” Zaslav, who boasted on many occasions that the company’s approach “is working,” emphasized that by the end of this year, the net leverage will be less than 4x.
The beleaguered media behemoth also said that it will be increasing its cost savings synergy targets from $3.5 billion to $4 billion over the course of the next two years. Moreover, there will be restructuring charges of $5.3 billion associated with this.
After investors processed Zaslav’s remarks after regular market hours, the company was able to recover some of its earlier losses. Following the news announcement, shares dropped as much as 4%.
Zaslav, who boasted on many occasions that the company’s approach “is working,” emphasized that by the end of this year, the net leverage will be less than 4x.
The beleaguered media behemoth also said that it will be increasing its cost savings synergy targets from $3.5 billion to $4 billion over the course of the next two years. Moreover, there will be restructuring charges of $5.3 billion associated with this. After investors processed Zaslav’s remarks after regular market hours, the company was able to recover some of its earlier losses. Following the news announcement, shares dropped as much as 4%.
Zaslav underlined that the business’s intellectual property (IP) will be a key driver in the company’s growth, and he announced a new production deal for numerous “Lord of the Rings” movies. He also said that the company will continue to focus on its redesign of the DC Universe.
“DC represents the biggest value generation opportunity for us,” Zaslav added, referring to the new “Superman” and “Batman” movies that are scheduled for release in 2025, along with the next film adaptation of “The Flash.” Zaslav was referring to the DC Extended Universe.
Also, he hinted at the much-anticipated relaunch of HBO Max and Discovery+ this spring, indicating that additional information will be provided at a press event that is set to take place on April 12. In addition, Zaslav verified previous claims that the independent streaming service Discovery+ will continue to operate concurrently with the soon-to-be-launched combo platform.
The company only attracted 1.1 million paying members in the fourth quarter, despite the inclusion of popular original series such as “The Last of Us,” “The White Lotus,” and “House of the Dragon,” as well as the return of HBO Max to Amazon Prime Video Channels (AMZN).
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Nonetheless, losses in the direct-to-consumer segment came in at $217 million, which is a $511 million improvement over the previous year’s total. This number was lower than what was expected by the consensus.
The executive acknowledged that the company will likely be under pressure in the coming year due to cyclical headwinds as well as ongoing secular issues, particularly in relation to advertising. The decline in revenue from network advertising was 17% in the fourth quarter, or 14% excluding the impact of foreign exchange, following a decline of 11% (without the impact of foreign exchange) in the third quarter.
In addition to the macro headwinds in the advertising industry, WBD has also been mired in controversy regarding the future of CNN. There have been speculations going around that the news network would be put up for sale in the near future.
Zaslav essentially shut that down during the call, saying, “Chris Licht and the team are focused on building an asset for the long term across cable and digital that is worthy of that great global brand.” He promised a “more inclusive range of voices and viewpoints” on the network, adding: “We must get it right…Nowhere is this more important in my view.”
Overall, Zaslav reiterated his confidence in the company’s future after a messy 10 months of restructuring efforts: “2023 will be a year of building — and off we go.”
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