Unlock the Editor’s Digest for free! Roula Khalaf, Editor of the FT, curates her top stories in this exclusive weekly newsletter.
According to sources familiar with the situation, Warner Bros. Discovery’s senior management is seeking to prevent a breakup as they work quickly to reverse the Hollywood giant’s plummeting stock performance. Following a nearly 70% decline in its share price since the company’s formation in 2022, CEO David Zaslav and CFO Gunnar Wiedenfels have explored all possible strategies to halt the downward trend. Despite considering a split of the company, executives have concluded that separating the failing television channels from the successful streaming and studio businesses would not be the optimal solution at this time.
The potential breakup was initially seen as an attractive option but would pose significant operational challenges and likely lead to prolonged legal disputes. Instead of a drastic measure like a breakup, Zaslav and Wiedenfels are exploring sales of smaller assets, such as the Polish broadcaster TVN or a stake in Warner’s video games business.
With hopes that investors will remain patient, the management aims to increase the company’s market capitalization to around $60 billion, significantly higher than the current value of $7.88 per share. The company’s focus post-merger has been on cost-cutting, debt reduction, and asset sales, as it plans to address its challenges and improve performance.
Vocabulary List:
- Management /ˈmænɪdʒmənt/ (noun): The process of dealing with or controlling things or people.
- Capitalization /ˌkæpɪtəlaɪˈzeɪʃən/ (noun): The total amount of outstanding shares in relation to the stock market value.
- Decline /dɪˈklaɪn/ (verb): To become smaller fewer or less; decrease.
- Operational /ˌɒpəˈreɪʃənl/ (adjective): Relating to the day-to-day functioning of a business or organization.
- Strategy /ˈstrætədʒi/ (noun): A plan of action designed to achieve a long-term or overall aim.
- Challenges /ˈtʃælɪndʒɪz/ (noun): Difficult tasks or situations that require effort to overcome.
How much do you know?
