Warner Bros. Discovery Expects a Friendlier Environment for Deal-Making Under David Zaslav incoming trump administrationOpening the door to industry consolidation, he said on Thursday.
“This will have a real positive and immediate impact on this industry that is needed,” Zaslav said on an earnings call with investors.
Zaslav’s optimism about the new administration came as the studio and CNN parent reported surprise quarterly profits on Thursday as cost controls and the Olympics-driven record surge. streaming subscriber It helped make up for the lack of major box office hits from its studios.
The company’s shares rose 11% in afternoon trading. The stock has lost nearly a quarter of its value so far this year.
The company’s Max streaming platform expanded into Europe with exclusive rights to stream the showcase sporting event just weeks before the Olympic Games in Paris, leading to a surge in subscribers.
Max also benefited from bundling the platform with Disney+ and Hulu, as well as a strong first season of “The Penguin” — a crime drama series released in September and based on a popular DC Comics villain.
Warner Bros. Discovery’s (WBD) streaming business, which is home to the Max and Discovery+ services, added 7.2 million direct-to-consumer subscribers in the third quarter, beating estimates for an additional 6.28 million, according to data compiled by Visible Alpha. Gives.
Max has achieved its strongest quarterly subscriber gains since the platform’s launch, Zaslav said, calling it “a meaningful moment” that has marked two years of building the service and reversed millions of dollars in losses. Is.
The streaming unit’s adjusted earnings before interest, taxes, depreciation and amortization more than doubled from a year earlier to $289 million, aided by lower content expenses.
WBD also made progress in this cost control effortsExpenses declined 5.5% in the quarter ended September 30. This helped it post a surprise profit of 5 cents per share. Analysts had expected a loss of 9 cents, according to data compiled by LSEG.
Revenue at the TV Networks division, which includes Discovery Channel, Animal Planet and Food Network, rose 3% to $5.01 billion, driven by the sub-licensing of Olympic Games rights to regional broadcast networks across Europe.
Revenue at WBD’s studio segment fell 17%, bringing total revenue to $9.62 billion, below estimates of $9.80 billion.
With releases like “Beetlejuice” in the July-September quarter, WBD’s studio division has struggled to repeat last year’s success of “Barbie”, the highest-grossing film of 2023.
Trump raises hopes of consolidation
Like its competitors, WBD is struggling with the decline in cable TV – long a profit engine – as more customers turn to streaming. The recession has put pressure on companies to look for alternatives for business.
Last week, Comcast said it was considering Shutting down your cable network In this, CNBC has been included in a separate company.
The industry needs to “meaningfully consolidate,” Zaslav said Thursday, adding that the incoming Trump administration could “bring momentum of change and opportunities for consolidation.”
Tough antitrust policies under the Biden administration have hurt bargaining across industries over the past few years.
