Warner Bros. Discovery on Thursday reported weaker-than-expected second-quarter results and said the merger of its two most popular streaming services would be complete by next summer.
The media giant announced its earnings for the first time since its merger to combine Discovery and WarnerMedia properties – which include HBO, CNN, Warner Bros., HGTV and TLC.
The shares fell nearly 10% in after-hours trading.
WBD CEO David Zaslav has come under fire for his decision to cut costs since the merger, including dropping the already completed “Batgirl” movie.
He said HBO Max and Discovery+ will merge next summer.
“We’ve had a busy and productive four months since the launch of Warner Bros. Discovery, and we’re more confident than ever of the huge opportunity ahead,” said Zaslav. “We are confident that we are on track to achieve our strategic goals and truly excel, both creatively and financially, and we couldn’t be more excited about the future of our business.”
During the quarter, the media giant reported a net loss of $3.42 billion, or a loss of $1.50 per share. The loss included more than $2 billion of amortization of intangible assets as well as $1 billion of restructuring and other charges, as well as nearly $1 billion of transaction/integration costs.
Revenues totaled $9.83 billion. Wall Street expected a net loss of 3 cents on revenue of $11.84 billion.
The company said its streaming subscriber base, which includes both Discovery+ and HBO Max, totaled 92.1 million.
WarnerMedia had reported 76.8 million HBO or HBO Max subscribers last quarter, with Discovery reporting 24 million, but those reports used an older definition of what a subscriber is, the company said.
The new numbers do not include “10 million legacy Discovery non-prime subscribers and non-activated AT&T Mobility subscribers from the first quarter subscriber count,” the company said.
WBD said that using its new definition of direct-to-consumer subscribers, the company added 1.7 million subscribers from the first to the second quarter.
Earlier this week, media reported that Zaslav would soon unveil details that would help the company earn $3 billion in 2023.
Investors got a glimpse of Zaslav’s plan on Tuesday when the media giant announced it would shelve his DC film “Batgirl,” starring “In The Heights” star Leslie Grace, as well as “Scoob!: Holiday Haunt”.
Cutting the two films saves WBD a fortune in marketing costs and back-end payments.
There have also been rampant rumors that there will be spinoffs from the merger of the company’s two biggest streaming services, HBO Max and Discovery+. On Wednesday, Hollywood trade The Wrap announced that the company plans to lay off 70% of its development business.
Since the closing of the $43 billion merger between Discovery and WarnerMedia, life has been different at the new WBD. Zaslav’s pragmatic, budget-focused leadership resulted in more than a few scam decisions. Shortly after the deal was struck, the CEO shut down CNN’s month-old $300 million streaming service, CNN+.
“We will clearly take quick and decisive action on certain elements, as you saw on CNN+ last week,” Zaslav told investors on an earnings call in April, vowing not to “overspend.” .
Zaslav quickly tapped Chris Licht, a former executive producer of “The Late Show with Stephen Colbert,” to replace former CNN chief executive Jeff Zucker, who resigned. Top brass are focused on boosting CNN’s ratings while shifting focus from opinion-based reporting to fact-based journalism.
Licht is currently working to shore up costs and buffer ratings while looking for ways to generate new revenue streams as network profits are reportedly on the verge of falling below the $1 billion mark for the first time since 2016. .
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