I confess I was feeling charitable on Sunday when I wrote about the positive aspects of David Zaslav’s financial journey at Warner Bros. Discovery. It’s essentially a publicly traded leveraged buyout that was saddled with $55 billion in debt upon its birth, along with a stub of equity value. In my opinion, Zaz’s best hope for creating more equity value has always been the unspectacular option of paying down that mountain of debt as quickly as possible—which isn’t that quickly, given the macroeconomic circumstances faced by WBD in particular and Hollywood more generally. 

Zaz and his Teutonic axman, C.F.O. Gunnar Wiedenfels, have done a decent job in this regard by getting the debt down to $40 billion. (Makes sense, given that Zaz and Gunnar’s pay is largely tied to their ability to reduce the company’s leverage and move it off the BBB credit cliff.) And yet, the equity markets are still having a cow. Since WBD emerged from the M&A operating theater in April 2022, the stock is off 65 percent. The company’s equity value is around $21 billion and the enterprise value is $60 billion. Back on creation day, WBD’s enterprise value was closer to $120 billion.