CNN is worthless after parent Warner Bros takes a $9.1 billion cut

What had been obvious “to the rest of us” for years is finally official: Last night, shares of Warner Bros. , which lost in every way and fell in every category on the income statement…

… but the biggest success – and surprise – it was from the company impressive $9.1 billion charge to write down the value of its traditional TV networks, including CNN and TNT, which were acquired in 2022 when Warner Bros Discovery was created as part of their acquisition of WarnerMedia. The write-down confirmed that legacy cable channels like CNN and TNT are no longer worth what they were when the $42 billion merger was completed. In fact, judging by the massive layoffs underway at the former, one can argue that CNN's value is now negative and will remain so until it is shut down. bleeding cash money

For the quarter, Warner Bros. reported a net loss of $10 billion, which included additional charges of $2.1 billion related to its merger. Revenue for the quarter fell 6.2% to $9.71 billion. Notably, the revenue collapse at the company's network segment, which includes CNN, won't stop.

“Two years ago, market valuations and prevailing conditions for legacy media companies were very different than they are today,” CEO David Zaslav said on a call with investors on Wednesday. “This impairment recognizes this and better aligns our book values ​​with our future prospects.”

As Bloomberg notes, the drop follows the NBA's decision last month to drop Warner Bros. as a broadcast partner and award an 11-year $76 billion media rights deal to Walt Disney, Comcast and Amazon.com. Warner Bros. filed a lawsuit against the NBA last month alleging breach of contract.

“At this point, we've turned it over to our lawyers,” Zaslav said on the call. “We are confident in our position.”

More importantly, the decline reflects the continued exodus of viewers from cable networks, such as the roar of propaganda bins that CNN fires on the air, taking advertising sales and ratings with them. subscribers who provide the bulk of conventional television's revenue. The changes have affected the media. Disney, which announced third-quarter results on Wednesday, reported declines in linear TV advertising sales and subscribers, sending shares to ten-year lows and confirming once again that once you wake up…well, everyone knows what happens next.

Warner Bros. has cut more than 2,000 jobs over the past year and cut 100 jobs at CNN last month. The company raised subscription prices for its Max streaming service in June.

Over the past 20 years, under different management teams, Warner Bros. has been involved in some of the most critical and worst merger deals. They include Time Warner's $124 billion merger with America Online in 2001 and AT&T Inc.'s subsequent purchase of Time Warner. for $87 billion in 2018.

The shares of Warner Bros. fell as much as 9.9% to $6.95, the lowest price since the merged company's shares began trading in April 2022, and are down more than 70% in the past two years .