I Went on a Zaslav Rant (Warner Bros Discovery Review)+Trump’s Bad Fed Idea
There are two major topics I am going to write about today. First, Warner Bros Discovery is on the brink. Second, and I swear this website isn’t going to become super political, Trump’s comments about giving The President influence over The Fed.
Warner Bros Discovery is a relevant company to me as a Disney shareholder. Their streaming service, the creatively named Max, is a direct competitor to Disney. Also, I hate WBD. They continue to try to erase their history as a cartoon company, which makes me mad as a lover of both Regular Show and Adventure Time. Adventure Time is my favorite show OF ALL TIME. So, I already hated them, and then David Zaslav did nothing as the company fell apart (stock is down 70% in two years).
In this most recent quarter, WBD wrote down the value of their cable business, the thing supporting them, by $9.1 billion, which is awful. WBD has officially stated that their cable business (legacy) is worth $9 billion less than they previously thought it was. This is on top of losing the NBA rights, which they are suing to get back, but that lawsuit isn’t going anywhere. WBD would be lucky to get a settlement out of that disaster. The legacy business is falling apart as the direct-to-consumer (Max) is staying virtually flat.
Max has so much great HBO content. All the HBO content ever made, Deadwood, The Sopranos, True Detective, The Wire, Game of Thrones, Eastbound and Down, etc., is smushed together with the garbage that Discovery pumps out. The HBO name is being degraded, while Zaslav cuts fan favorites and banishes Cartoon Network (an extremely, extremely popular aspect of Max) to the shelf.
And we haven’t even started talking about the loss of NBA rights. The only thing propping up WBD’s legacy business is the fees that carriers pay them for TNT, TBS, etc. Those channels are solely popular because they carry the NBA and the famous Inside the NBA team, shoutout Kenny. WBD’s legacy business is now worthless because Zaslav wouldn’t pony up. Some have made the case that the money they have saved by not burning it in the NBA fire puts the company in a better position, and for a while, I thought the WBD brass agreed. Yet, they are suing the NBA to make the NBA agree to their contract like Jilted Weatheralls.
AND THEY HAVE $40 BILLION IN DEBT COOKING ON THEIR BALANCE SHEETS. THE LEADERSHIP OF THIS COMPANY IS SO UNBELIAVBLY OUT OF TOUCH WITH REALITY.
And here was the glorious leader David Zaslav’s answer to this myriad of challenges: “It’s fair to say that even two years ago market valuations and prevailing conditions for legacy media companies were quite different than they are today, and this impairment acknowledges this and better aligns our carrying values with our future outlook.”
A simplified version of what he just said is “Nobody could have seen this change in cable coming. Conditions were different two years ago in the market, so you can’t blame me,” which is an unbelievably short-sided and mind-numbingly idiotic thing to say. EVERY ANALYST FOR SIX YEARS HAS BEEN SAYING CABLE WOULD DIE. THERE HAVE BEEN R.I.P CABLE T-SHIRTS AVAILABLE TO BUY SINCE 2019.
Max revenue fell 5%, total EBITDA was down 15%, and the lone bright spots David “I Suck At My Job” Zaslav could point to was a slight bump in Max subscribers, and the sports bundle with Fox and Disney later this year, which will be a moderate success at best.
I never want to see David Zaslav near a company I own, ever. I don’t want him to consult, I don’t want him to know anyone who works at a company I own, and I don’t even want him in the same city as a company I own. This man is a toxic pile of bad leadership, and I couldn’t be more pumped as a Disney shareholder.
Now to another man I really hate. Donald Trump wants the POTUS to have influence on The Fed. That is such a bad idea. The Fed has to be brave, and all politicians are cowards.
