By The Big Magazine Staff
Is Bigger Really Better?
On Thursday, Warner Bros Discovery stocks surged by 6.3% following a report by the Financial Times indicating that the media conglomerate is considering separating its digital-streaming and studio operations from its traditional television networks. The proposed plan would separate the movie studio and streaming platform (Max), while the linear networks (CNN, TBS, TNT, Discovery Channel, etc.) would be part of a separate entity.
The breakup reportedly follows news that WBD is $40 billion in debt and shares have been in the doldrums. The break-up lead to question if bigger really is better when if comes it mega mergers as a pathway to growth and market dominance.
Since merging Discovery, Inc. with WarnerMedia in April 2022, Warner Bros. Discovery President & CEO David Zaslav has made cost-cutting one of his main priorities. The merger resulted in approximately $50 billion in debt, which Zaslav and CFO Gunnar Wiedenfels have been working to reduce. However, there is still a significant amount of debt remaining, with over $40 billion left to address.
To tackle the problem, possible solutions are selling off assets or splitting the company. Warner Bros. Discovery gained attention for its forceful staff reductions to reduce expenses. The areas affected by the layoffs are finance, business affairs, production, and MAX originals. Zaslav has also saved money by axing fully or almost finished movies such as “Batgirl” and “Coyote vs. Acme,” and eliminating content from Max’s collection.
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