00:00In earnings, Warner Brothers Discovery reported an 11 percent drop in revenue year over year,
00:05the slump coming in part due to losing NBA rights and a weaker movie lineup. Let's get more with
00:10Bloomberg Intelligence Media Analyst Geetha Raghunathan. And of course, the backdrop for
00:15all of this is the drama continuing as to whether the courts will allow Paramount to actually buy
00:21the thing. Geetha, what was the setup for this? What did we learn in today's earnings?
00:26So the earnings were fine, Danny. I mean, as you pointed out, yeah, we did have that drop in
00:31revenue. You had a 30 percent decline in advertising. And of course, 20 percent of that was because of
00:37the lack of NBA. On the flip side, though, the good the good part of it was that, you know,
00:41we also had EBITDA that actually got a little bit of a bump. The TV EBITDA, especially because of those
00:47lower costs with no NBA. Studio was mixed. You know, Supergirl hasn't really delivered.
00:52Streaming, though, was very, very good. So the fundamentals seem OK. But as you pointed out,
00:56the earnings are just a sideshow at this point. It's really all about that Paramount Skydance
01:01transaction, which has now been delayed from September of this year to probably June of next
01:07year. And that makes it risky to think about what kind of company is going to exist next year.
01:13So I'm wondering what, if anything, the earnings tell us about the Warner Brothers new management.
01:18They've only been in place for about a year. If you were if you had to discount the idea of
01:23the
01:23merger, what of it? What did we learn? Yes, I think, Mike, what we're seeing is that the Warner
01:29Brothers fundamental story is actually in pretty good shape. So this this management team, as you
01:34pointed out, David Zaslav and his whole crew have really done a good job in kind of turning things
01:38around streaming. They've made it profitable. We've already gotten to a margin target of the margin
01:44target of 20%. We've already gotten to about 17%. So really, the question is, what happens on June
01:494th of 2027 when the merger agreement actually ends? Are these guys going to settle? That is what
01:56Paramount Skydance absolutely wants. But, you know, Warner Brothers Discovery, I think, is in a good place
02:01no matter what. If the merger deal just expires and it doesn't go through. Remember, they collect
02:06seven billion dollars in termination fees that that puts them in a really, really good position,
02:12apart from having a pretty strong, you know, fundamental business.
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