Not a great week for the Hollywood rumor mill, right? I think the combination of industry-wide anxieties and some bad trade reporting led to a freak-out in advance of a pretty uneventful Warner Bros. Discovery reveal. No, HBO Max is not shuttering. Or pulling back from international. Or becoming a tile on Discovery+ (though I’m told one name being discussed for the planned combined streaming service is HBO Discovery). Someone actually came up to me at The Grill and asked which outlet I thought would pick up the sure-to-be-dumped Hacks. Really? An Emmy winner? I even heard from an otherwise rational person at Warners who believed the company was 100 percent selling DC, as if that made any sense.
In fact, as I noted in my Batgirl dispatch, the big surprise on Thursday was the increasingly grim financial situation of the combined company as a whole. A $2 billion decline in projected EBITDA for 2023, a worsening outlook for the linear networks, and, of course, that $50-something billion in crushing debt. All entertainment companies are in a weird place right now, caught between the cratering TV business and the Great Netflix Correction. But WBD, despite all its great assets, is in an especially weird place because of its financial situation. Meaning that while Peacock might be losing nearly a half a billion dollars a quarter for Comcast, and Disney’s direct-to-consumer division bled $887 million, those companies haven’t been bought and sold multiple times in the past decade. And they’re offsetting the streaming losses with broadband and theme park profits. WBD is both smaller and more dependent on television/streaming revenue.
An analyst on the Thursday call quixotically asked C.E.O. David Zaslav when HBO might get back to its linear heyday, when it was generating much bigger profits. Given the EBITDA-busting investment in HBO Max over the past few years, the question seemed cute. Now it’s all about boosting that dreary stock price, by any means necessary: As journalist Claire Atkinson pointed out, “In 2016 AT&T agreed to acquire Time Warner for $107 per share. Now $WBD (Time Warner+Discovery) has a share price of $14.59.” Yikes yikes yikes.