Warner Bros Discovery bondholders approve plan to split the company
June 16 (Reuters) - Warner Bros Discovery (WBD.O), opens new tab bondholders overwhelmingly approved a plan to split the corporation and put in place a new capital structure related to the deal, the company said Monday.
Bondholders voted to remove restrictions that could have prevented the company from carrying out its plan to cleave itself into two publicly traded entertainment companies, separating its studios and HBO Max streaming service from its fading cable networks.
Credit investors also supported the company's plan to buy back nearly half of its $37 billion in debt resulting from the 2022 merger of WarnerMedia and Discovery.
The bondholders had until Friday to approve changes to debt covenants that would leave the legacy cable business - and its bondholders - holding the lion's share of debt. The less indebted streaming and studio business, meanwhile, would have flexibility to better compete with rivals.
But the details of the split, which analysts told Reuters were highly complex, left certain bondholders concerned they could be left empty-handed. They said it would leave some holding unsecured bonds tied to the declining cable business, meaning they would lack collateral protection and come second in priority of payment to the secured bondholders in the event of bankruptcy.
The law firm Aiken Gump Strauss Hauer & Field failed in its effort last week to organize bondholders to negotiate better terms, according to published reports.
Warner Bros Discovery said the consent solicitation received support from the majority of all bondholders, with up to 99% of certain groups voting their support. Credit investors have until June 23 to tender their bonds.
Credit ratings agencies Fitch and Moody's downgraded Warner Bros Discovery to junk status last week, even as investors weighed the deal's likely impact on holders of its debt. S&P Global Ratings had downgraded Warner debt to junk status earlier this month, citing the challenges confronting its cable networks.
The rating downgrades triggered forced selling by funds with investment-grade portfolio mandates, according to a person familiar with the matter. This in turn resulted in net selling of the company's bonds, the person familiar added.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Times
24 minutes ago
- Times
WhatsApp to introduce adverts to its mobile messaging
WhatsApp is planning to introduce paid advertising features to its mobile messaging service around the world. The business, which is owned by Meta, the American technology giant behind Facebook and Instagram, said the feature would be rolled out globally in the coming months. WhatsApp, which has previously boasted about its lack of advertising, said that adverts would be kept separate from the main conversation area of its app, and would instead appear in the 'status' section, where users can already follow 'channels' run by businesses. The service has about three billion monthly active users, including about 200 million businesses and the move is likely to be lucrative for Meta, but could also prove contentious. Meta, then called Facebook, bought WhatsApp for $19 billion in 2014. It is still the group's largest purchase. Before this, Brian Acton, co-founder of WhatsApp, had said 'no ads' was part of the company's mission statement. WhatsApp had denied reports in 2023 that Meta was considering an advertising model for the messaging service. The new advertising features on WhatsApp bring it closer to Facebook and Instagram. Businesses with 'channels' on the mesaging service will be able to promote adverts on the updates tab of the app, and will also be able to charge a subscription fee for users to access additional content. WhatsApp is expected to take a 10 per cent commission for this. Companies will also be able to advertise via a 'status update' with links to products and services, similar to the stories function on Instagram, and will be able to pay to promote their channel. The service already provides services to businesses such as a customer service messaging. WhatsApp said: 'These new features will appear only on the updates tab, away from your personal chats.' It added that advertisers would not be able to access the content of users' messages. 'Your personal messages, calls, and statuses remain end-to-end encrypted, meaning no one (not even us) can see or hear them.' It said it would allow access to users' information 'like your country or city, language, the channels you're following, and how you interact with the ads you see' for its advertising data. 'We will never sell or share your phone number to advertisers. Your personal messages, calls and groups you are in will not be used to determine the ads you may see,' WhatsApp said in a post about the new services. 'We've been talking about our plans to build a business that does not interrupt your personal chats for years and we believe the updates tab is the right place for these new features to work.' Having faced criticism for installing an unremovable 'ask Meta AI' function recently, WhatsApp appears to be aware of the potential for the move to alienate users. The WhatsApp boss Will Cathcart said it 'won't affect your inbox … if you're only using WhatsApp for messaging, you're not going to see this.' The updates tab is used by 1.5 billion people a day but Cathcart said it was 'not particularly popular' in the UK compared with other parts of the world. Meta has been sued by the Federal Trade Commission, a US regulator, which alleges it illegally acquired Instagram and WhatsApp to stifle competition. Mark Zuckerberg, Meta's founder and chief executive, has pushed back on the claims, stressing that Meta faced intense competition from YouTube and TikTok, the Chinese-owned video-sharing app. This was evidenced by a surge of traffic that Facebook and Instagram experienced when TikTok was briefly taken offline in January, Meta has argued.
Times
24 minutes ago
- Times
Young men want ‘strong and independent' female film characters
Young men are increasingly responding positively to 'strong and independent' female film characters, rather than those in supporting roles, according to a study. Research has found that younger male viewers prefer character-driven storytelling with narrative depth to relentless, high-octane action scenes. The demographic demonstrated a 5 per cent higher 'immersion score' when shown character-driven trailers, compared with more action-driven promotional campaigns, according to an analysis of 37,000 people by the audience testing company DiO. Recent films with strong female characters have included Demi Moore's The Substance, Cynthia Erivo's Wicked and Cate Blanchett's Tár. The firm used facial coding, biometric and cognitive data to reach its conclusions, which it said upended assumptions about audience appetites. Ade Shannon, chief executive and founder of DiO, told the entertainment website Deadline that the findings could prove instructive to film studios.'This data points towards a shifting perception of masculinity and an evolving appetite for richer, more grounded storytelling,' he said. The film industry continues to rely heavily on 'focus groups and long-held audience assumptions' to assess how best to market films to specific audiences, he claimed. But these 'outdated concepts' were costing studios millions of dollars each year in lost revenue because they were alienating potential audiences. The marketing team behind Danny Dyer's latest film Marching Powder used the research to increase interest among women ALAMY DiO worked with True Brit when the production company was marketing the Danny Dyer film Marching Powder, released in March. In the film, Dyer's character Jack Jones has six weeks to turn his life around, save his marriage and avoid prison by overcoming his drugs habit. Chris Besseling, True Brit's head of theatrical distribution, marketing and publicity, said the company had developed a 'two-pronged campaign' as a result of DiO's findings. 'We were able to identify the specific moments, characters, lines and gags from the trailer that resonated most strongly with the two distinctly different audiences that we were targeting,' he said. The strategy was said to have helped propel the film's box office performance past £3 million, more than twice its budget. The growth was attributed to a 45 per cent increase in the anticipated female audience, which was achieved without putting male fans off. Last December a study of 750 men and boys aged 8-30 found a growing desire for a variety of fully developed, relatable role models in films. The global insights and strategy company National Research Group discovered that almost half of those surveyed were keen for role models who were emotionally vulnerable and had deep and meaningful friendships with other men.
Reuters
26 minutes ago
- Reuters
EchoStar soars 50% after report Trump urged EchoStar, FCC chair to reach deal on licenses
NEW YORK, June 16 (Reuters) - Shares of EchoStar (SATS.O), opens new tab rose as much as 50% on Monday following a late Friday Bloomberg report that U.S. President Donald Trump urged EchoStar Chairman Charlie Ergen and Federal Communications Commission Chair Brendan Carr to reach a deal over the fate of the company's wireless spectrum licenses. The telecommunications services company's stock also surged after the bell on Friday due to the report, which said Trump met on Thursday with Ergen and he telephoned Carr, who came to the White House to join the meeting. EchoStar did not immediately respond to a request for comment. The FCC told EchoStar in May it was investigating the company's compliance obligations to provide 5G service in the U.S. EchoStar has been trying to protect its wireless spectrum licenses from the threat of revocation by the FCC. EchoStar has disclosed that it missed roughly $500 million in interest payments and cited uncertainty around the FCC review. UBS analysts in a Sunday note said they believe the recent developments "suggest the forfeiting of Echostar's airwaves is less likely and brings spectrum valuation back into focus." They noted they expect interest from wireless carriers in EchoStar's spectrum licenses "given the shortage of near-term spectrum opportunities and the compatibility of Echostar's airwaves with existing network equipment/deployments," such as those with T-Mobile US (TMUS.O), opens new tab and AT&T (T.N), opens new tab. Still, the analysts wrote that with the current situation unresolved, their "neutral" rating on the stock remains. The stock hit an intraday high of $25.29 on Monday after closing on Friday at $16.84. Through Friday's close, EchoStar's stock had shed about 30% of value since the FCC notified, opens new tab the company of its probe.
