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WBD Split Announced

michael hagerty

michael hagerty

The studios (Discovery and Warner Bros.) and streaming (HBO Max) will be the core company, with the cable nets (called "global networks") spun into its own separate publicly traded company.

Essential pull-quote:

"As the cable television business contracts in the streaming era, Zaslav is offering shareholders a way to invest in the growing HBO Max part of the business without exposure to cable."

Timetable: Mid-2026. Full story:

 
Yes and if approved this would be the second company to spin-off their cable division after Comcast where CNBC and MSNBC goes to Versant in the spinoff and Comcast keeps Peacock, NBC, Telemundo and their affiliates.
 
TheBigA said:
It's his company. He can do what he wants. He's not an employee.
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It is not "his company". It's a public company. Regardless of what his stock position is in WBD, David Zaslav is a director and executive employee, and as an executive he's answerable to the entire board. He (theoretically) has a fidiciary responsibilities to all other stockholders to act in their best interest, not just his own.
 
Weiserguy said:
It is not "his company". It's a public company. Regardless of what his stock position is in WBD, David Zaslav is a director and executive employee, and as an executive he's answerable to the entire board. He (theoretically) has a fidiciary responsibilities to all other stockholders to act in their best interest, not just his own.
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He's the CEO. That means Chief Executive Officer. He makes the decisions. I'm sure this whole proposal went before the board and got their approval.
 
The last couple of grafs of today's Hollywood Reporter piece sums it up nicely:



"Zaslav’s PR was a nightmare: he became the name and the face of Hollywood corporate greed by killing off completed and near-completed projects in the name of tax write offs. A certain panic sets in when you have $50 billion in debt to pay down in a struggling marketplace.

So Zaslav jumped ship. He will soon be rid of the “Also Ran” that is cable TV — and he’ll be rid of most of WBD’s existing debt as well. If all goes according to plan, Zaslav will have effectively traded in a dying basic-cable bundle for the most influential brand in television and a top-2 or 3 film studio. And he got paid hundreds of millions of dollars to do it."



Full story: David Zaslav Finally Cuts the Cord
 
The bond / debt holders might have a say in this. It depends on the wording of the of the notes. I have to figure out what ready will be the debt load of each company once the new stock is issued.

Here is an example of how not to treat bondholders:

Windstream screwed up when they tried to put their fiber assets into another company (Uniti) and lease them back for $54 million a month, but it really was a financing agreement where Uniti got the network which was already colaterial for Windstream bonds.

A bond holder saw Windstream transferred assets and leased them back but really was financing a sale which violated the terms of the bond's asset for security which made the accured interst and principal due.

In the end Uniti ended up paying Windstream $490 million, and $40 million to buy the fiber assets they leasing to Windstream, and $244.5 million in proceeds from selling Windstream debt. Also they have to make $1.75 billion in Windstream networks over 10 years.
 
secondchoice said:
The bond / debt holders might have a say in this. It depends on the wording of the of the notes. I have to figure out what ready will be the debt load of each company once the new stock is issued.
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According to WBD, the plan is for most of that to go with the spun-off assets:

www.hollywoodreporter.com

“Majority” of Warner Bros. Discovery’s $37 Billion in Debt Will Be Spun Off With TV Networks, Its CEO Says

But “a not-insignificant portion” will remain with Streaming & Studios — and with David Zaslav.
www.hollywoodreporter.com www.hollywoodreporter.com
 
secondchoice said:
Another Citadel, Cumulus, Audacy, or Clear Channel. When will bond buyers learn media companies don't do well with huge debt.
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I think they have learned it. Right now, Warner Bros, HBO and HBO Max are saddled with that debt. This puts the majority of that debt on the same ice floe with the declining assets. Look for the bondholders to keep the studio/streaming stock and abandon ship on the declining assets when the spinoff happens.
 
michael hagerty said:
According to WBD, the plan is for most of that to go with the spun-off assets:

www.hollywoodreporter.com

“Majority” of Warner Bros. Discovery’s $37 Billion in Debt Will Be Spun Off With TV Networks, Its CEO Says

But “a not-insignificant portion” will remain with Streaming & Studios — and with David Zaslav.
www.hollywoodreporter.com www.hollywoodreporter.com
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This will only hasten the demise of the cable networks, especially since they will have no "plan B". But I suspect that's the plan and keeping them part of WB only delays the inevitable.
 
mnradiofan said:
This will only hasten the demise of the cable networks, especially since they will have no "plan B". But I suspect that's the plan and keeping them part of WB only delays the inevitable.
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Keeping them part of WB not only delays the inevitable but drags down the stock price and threatens profitability and survival.

The best time to off-load declining assets was the minute they started declining. The second-best time is now.
 
michael hagerty said:
Keeping them part of WB not only delays the inevitable but drags down the stock price and threatens profitability and survival.

The best time to off-load declining assets was the minute they started declining. The second-best time is now.
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I don't get why they don't just shut down the declining properties instead of spinning them off. That other company is heading off a cliff, as is Versant.
 
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