Latest news with #GunnarWiedenfels
Forbes
3 hours ago
- Business
- Forbes
Warner Bros. Discovery Splits In Two: What To Look For Next
Burbank, California, USA - January 9, 2024: Nestled in the heart of the studio, the 513 seat Steven ... More J. Ross Theater is the most elegant and technically advanced theatrical and screening venue at Warner Bros. Studios. The password is 'separate.' Warner Bros. Discovery's formal announcement of its anticipated separation into two distinct media companies follows the industry's latest M&A trend. WBD joins Comcast and Lionsgate – and Fox of several years ago - in spinning off cable networks that still throw off cash but represent a spectacularly successful media past rather than a foundation for the future. As to the specifics of the WBD plan, the company's separation very definitively undoes the merger of the legacy Discovery Communications and Warner Media that closed only three years ago, which of course followed in the footsteps of AT&T purchase of Warner Media which only closed in 2018. There will be two new companies, one now referred to as Streaming & Studios, consisting of the Warner Bros. studio and library, HBO Max, and HBO, the only remaining legacy cable network in its stable. That company will be led by current WBD CEO David Zaslav. The second company is for now named Global Networks, to be headed by current WBD CFO Gunnar Wiedenfels. This company will look much like the old Discovery paired with the old Turner Networks, consisting of Discovery Channel, CNN, TNT, Food Network, and a host of others. This entity – unlike Comcast's Versant spin-off – will assume a great deal of the debt inherited from the purchase of Warner Media by Discovery, adding more challenging fuel to its fire. The legendary stage actor Edmund Kean supposedly said on his death bed: 'Dying is easy; comedy is hard.' So too, is separation easy. The hard part is to successfully shape what comes next. Where should we be looking? Every deal has its own rationale and its own narrative that follows separation – you can't say the act itself guarantees any particular outcome. For Time Warner, it was certainly smart to spin-off both its Time Warner Cable and Time Inc. publishing businesses, but the outcomes for the separated entities diverged wildly. The cable systems eventually landed successfully in the arms of Charter Communications, while life for the stable of iconic Time Inc. magazines has been anything but stable, from the end of Entertainment Weekly to the demise of Sports Illustrated in all but name only. Viacom and CBS tried the merger, separation and then re-merger (as Paramount Global) route, only to end up now in the purgatory of deal hell with Skydance Media's proposed acquisition of Paramount. There isn't much of anything positive to point to in this whole saga. For the Streaming & Studio business, what's left for consolidating? Lionsgate post-Starz spin-off would be the most obvious choice, without the weight of cable networks on both sides and with a host of still-viable Lionsgate franchises including John Wick, The Hunger Games and Saw. This could be a mini-Disney move for the always-deal focused Zaslav. And as to streaming, the move back to the HBO Max brand might end up complicating a quick move to consolidate with other streaming services such as Peacock and Paramount Plus. On the Global Networks side, besides the inevitable continuation of cost-cutting, I'm very curious to see where they go with sports. The separation announcement itself called out 'TNT Sports in the U.S.' among only three listed cable brands (with CNN and Discovery). After losing the NBA rights under its new media agreement, TNT has seemed hell-bent to acquire more sports rights including Roland Garros tennis and the new Club World Cup in soccer. But getting significantly bigger in sports will be extremely expensive, battling both legacy media companies and Big Tech. The new Versant, led by long-time sports media executive Mark Lazarus, has made clear its own intent to double down on sports. And of course, Disney is about to launch its standalone ESPN as sports media competition rages. There was a strange meta-moment this past weekend as CNN, the most prototypical name in cable news, broadcast a live Broadway production of Good Night and Good Luck, the George Clooney vehicle about the legendary newscaster Edward R. Murrow from the 'Tiffany' broadcaster CBS News. But are there two more troubled brands in the world of news today than CNN and CBS News? Paramount Global, CBS's owner, is battling for its corporate life. CBS News is weighing accommodations to the Trump Administration that have already leveled its management and might yet threaten the future of 60 Minutes. CNN's troubles have been under the microscope at least since the WBD takeover, and its digitally centered future is an uncertain one at best. Might there be some partnering in the future for these entities? Among the new Global Networks and its competitors, will there finally be the sunsetting of secondary and tertiary cable network brands? How long can networks such as Paramount's VH1, Disney XD and a host of Global Networks remain 24X7 cable networks as opposed to shifting investment to digital platforms? Decisions like these, far more than corporate separations, will really determine the future direction of these companies and their brands.
Yahoo
8 hours ago
- Business
- Yahoo
Warner Bros. Discovery Formalizes Break-Up Plans
In most break-ups, the questions are, 'Who gets the dog, the air fryer, or the Sonos Sound Bar?' In this one, they're 'Who gets The Sopranos, the American League Wild Card Game and, most importantly, the roughly $38 billion of corporate debt?' On Monday, Warner Bros. Discovery — roughly three years after its corporate marriage — announced the terms of its long-discussed separation, which will create a separate entity that will take on much of the media giant's cable TV portfolio. READ ALSO: Washington Trade Talks With Beijing Drive S&P 500 Toward Record High and Apple Still Won't Ride the AI Hype Train Like the rest of its pre-streaming Hollywood peers, Warner Bros. Discovery finds itself trapped between two eras. On one side, a declining cable empire that, despite existential fears, still generates pretty good cash flow. On the other side, an emergent streaming business that could be a nimble new media enterprise, were it not bogged down by years and years of debt acquired as the legacy media empire transitioned into the future. And, much like Comcast, WBD has decided the best way forward is to split into two separate, independently operated, publicly traded companies. So what will the two new parts of the empire look like? One is the likely-to-be-renamed Streaming & Studios company, which will be led by current WBD CEO David Zaslav. The company will consist of exactly what it sounds like: streamer HBO Max and its 122 million global subscribers, the Warner Bros. film studio, cable crown jewel HBO, and the international versions of TNT Sports, among other bits and pieces. The other will be the also likely-to-be-renamed Global Networks company, to be led by WBD CFO Gunnar Wiedenfels. That company will take control of WBD's various cable brands, including CNN, the US version of TNT Sports, TBS, HGTV and Cartoon Network — and, most importantly, a 'majority' of WBD's debt load. Debt Bet: That debt won't be entirely Global Network's burden; the unit will retain as much as a 20% stake in the Streaming & Studios business, which will help with payments. For reference, in WBD's first-quarter earnings report, the company said its cable-centric 'Global Linear Brands' unit generated nearly $1.8 billion in adjusted EBITDA, compared with its 'Streaming & Studios' unit's $540 million. This post first appeared on The Daily Upside. To receive delivering razor sharp analysis and perspective on all things finance, economics, and markets, subscribe to our free The Daily Upside newsletter.
Hypebeast
11 hours ago
- Business
- Hypebeast
Warner Bros. Discovery Is Splitting Into Two Companies
Summary Warner Bros. Discovery (WBD) has announced a significant restructuring, revealing plans to split into two independent publicly traded companies by mid-2026. This strategic move, announced earlier this week, aims to sharpen the focus and strategic flexibility of its diverse assets amidst the ongoing shift from traditional cable to streaming services. This new company will encompass WBD's premium content creation arms, including HBO, HBO Max, the Warner Bros. Television and Motion Picture Group, DC Studios, Warner Bros. Games, and its extensive film and television libraries. David Zaslav, the current Warner Bros. Discovery CEO, will lead this division as President and CEO. This company will focus on scaling HBO Max globally and investing in world-class programming. This new entity will house WBD's portfolio of traditional linear television networks and their digital extensions. This includes major brands like CNN, TNT Sports (in the U.S.), Discovery, and top free-to-air channels across Europe, along with digital products such as the profitable Discovery+ streaming service and Bleacher Report. Gunnar Wiedenfels, WBD's current Chief Financial Officer, will serve as President and CEO of Global Networks, focusing on maximizing network assets and driving free cash flow. This separation effectively unravels much of the original$43 billion USD mergerthat created Warner Bros. Discovery just three years ago, a deal that left the company with significant debt. The move is seen as a direct response to the 'cord-cutting' phenomenon, which has led to declining viewership and profitability in traditional cable, while streaming services continue to attract hundreds of millions of users. By creating two distinct companies, WBD aims to allow each to pursue specific investment opportunities, leverage their unique financial profiles, and enhance shareholder value.
Zawya
13 hours ago
- Business
- Zawya
Warner Bros Discovery splits streaming from cable TV in latest media shakeup
LOS ANGELES - Warner Bros Discovery said it would split into two publicly traded companies, separating its studios and streaming business from its fading cable television networks as the parent of HBO and CNN looks to compete better in the streaming era. The breakup is the latest unraveling of decades of media consolidation that created global conglomerates spanning content creation, distribution and in some cases, telecommunications. It unwinds WarnerMedia and Discovery's 2022 merger, aiming to grow the streaming and studios business without the drag of the declining networks unit. The new streaming-and-studios company will include Warner Bros, DC Studios and HBO Max - the crown jewels of WBD's entertainment library. The networks unit, which will hold up to a 20% stake in its counterpart, will house CNN, TNT Sports and Bleacher Report. CEO David Zaslav will lead the streaming and studios unit, while CFO Gunnar Wiedenfels will head the networks unit. The separation will be structured as a tax-free transaction and is expected to be completed by mid-2026. "We've continued to analyze how our industry is evolving," Zaslav told investors. "The right path forward became increasingly clear ... to separate global networks and streaming and studios into two independent, publicly traded companies." Most of the company's debt would be held by the global networks company. WBD had gross debt of $38 billion as of March. The company said it secured a $17.5 billion bridge loan from J.P. Morgan that it would use to restructure its debt. Creditors of WBD are consulting advisers after the entertainment company proposed banning investor cooperation pacts as part of its plan to split, the Wall Street Journal reported on Monday. Law firm Akin Gump Strauss Hauer & Feld is organizing bondholders to push back against WBD's proposal and negotiate better terms, the WSJ report added, citing people familiar with the matter. Reuters could not immediately confirm the report. Shares fell almost 3% at midday, reversing the 13% gain that came in the hours after the announcement. WBD's stock remains down nearly 60% since the merger, hurt by cable subscriber loss, tough streaming competition and investor concerns over the debt-laden company's direction. Brian Wieser, CEO of Madison and Wall, an advisory firm for media, technology and other companies, said the split will not fix underlying WBD's weakness. "If anything, (it) could make them worse off by favoring financial engineering over focusing on improving existing operations or pursuing new opportunities for growth...a deal like this can hamstring both sides of the company until the transactions are closed," said Wieser. Media executives had initially anticipated a wave of consolidation under President Donald Trump's administration, though that has not come to pass. "For a series of reasons, that proved harder than anyone thought," said Jonathan Miller, a veteran media executive who now serves as chief executive of Integrated Media. "It looks like the characteristic of this year will be how do we get our house in order, and do what we can that's under our control." Comcast is spinning off most of its NBCUniversal cable networks portfolio into a separate company, Versant. Lionsgate Entertainment completed the separation of its Starz cable network from its film and television studio in May. Last week, about 59% of WBD shareholders at the annual meeting voted against executive pay packages, including Zaslav's $51.9 million 2024 compensation, in an advisory vote that signaled dissatisfaction. Like other entertainment companies, WBD is struggling with declining ratings and revenue at its cable networks. Consumers have been dropping pay-television subscriptions in favor of streaming services. "WBD is a hotchpotch of businesses which have failed to win over the market," said AJ Bell analyst Dan Coatsworth. The split gives Warner Bros "a better chance to gain broader investor interest and focus management on fewer things." In December, WBD announced a separation of streaming and studio operations. The company has been positioning its streaming service as a premium destination with titles such as "The Last of Us" and "Hacks," after initially betting that a blend of HBO dramas and Discovery's lifestyle content would broaden its appeal. It revived the HBO Max branding last month to drive a renewed emphasis on premium content, and aid global expansion. The streaming service had about 122 million subscribers as of March. It expects its subscriber base to exceed 150 million by the end of 2026, which would still trail Netflix's more than 300 million subscribers and the combined 181 million subscribers of Disney+ and Hulu. MORE DEALS Some analysts now expect more deals in the media sector, pointing to Comcast's plan to spin off most of its cable networks, including MSNBC and CNBC. "The outlook for the cable network business broadly is pretty ugly and I assume there will be consolidation there," said Jeff Wlodarczak, analyst at Pivotal Research Group. He said WBD's cable networks could be a logical fit for Comcast's upcoming cable spinoff, while its streaming and studios business might combine with another player such as Comcast's Peacock. Any merger will require approval from U.S. antitrust regulators who have signaled they intend to focus on mergers that reduce competition in ways that harm consumers or workers. Industry observers say consolidation would likely increase consumer prices. The trend has already begun, as streaming services look to turn a profit. Zaslav has said he expects a more deal-friendly environment under Trump. During his first term, Trump repeatedly attacked CNN, and his Department of Justice moved to block the AT&T–Time Warner merger. The pending Paramount Global-Skydance Media merger has yet to gain regulatory approval, as Trump presses his civil suit against Paramount's CBS News for its "60 Minutes" interview last October with his Democratic rival for the White House, former Vice President Kamala Harris. J.P. Morgan and Evercore are advising WBD on the deal, while Kirkland & Ellis is serving as legal counsel.
TimesLIVE
13 hours ago
- Business
- TimesLIVE
Warner Bros Discovery splits streaming from cable TV in latest media shakeup
Warner Bros Discovery said it would split into two publicly traded companies, separating its studios and streaming business from its fading cable television networks as the parent of HBO and CNN looks to compete better in the streaming era. The breakup is the latest unraveling of decades of media consolidation that created global conglomerates spanning content creation, distribution and, in some cases, telecommunications. It unwinds WarnerMedia and Discovery's 2022 merger, aiming to grow the streaming and studios business without the drag of the declining networks unit. The new streaming and studios company will include Warner Bros, DC Studios and HBO Max, the crown jewels of WBD's entertainment library. The networks unit, which will hold up to a 20% stake in its counterpart, will house CNN, TNT Sports and Bleacher Report. CEO David Zaslav will lead the streaming and studios unit, while CFO Gunnar Wiedenfels will head the networks unit. The separation will be structured as a tax-free transaction and is expected to be completed by mid-2026. "We've continued to analyse how our industry is evolving," Zaslav told investors. "The right path forward became increasingly clear, to separate global networks and streaming and studios into two independent, publicly traded companies." Most of the company's debt would be held by the global networks company. WBD had gross debt of $38bn (R672.6bn) as of March. The company said it secured a $17.5bn (R310bn) bridge loan from JP Morgan that it would use to restructure its debt. Creditors of WBD are consulting advisers after the entertainment company proposed banning investor cooperation pacts as part of its plan to split, the Wall Street Journal reported on Monday.
