(Bloomberg) -- Warner Bros. Discovery Inc., the parent of CNN and TNT, posted a second-quarter charge of US$9.1 billion after writing down the value of its traditional TV networks.
The company, created in 2022 when Discovery Inc. acquired WarnerMedia, has concluded that cable channels like CNN and TNT are no longer worth what they were when the $42 billion merger was completed.
Shares of Warner Bros. fell as much as 9.8% to $6.96 in extended trading after the announcement.
The action follows last month’s decision by the National Basketball Association to drop Warner Bros. as a broadcast partner and award a $76 billion, 11-year media rights deal to Walt Disney Co., Comcast Corp. and Amazon.com Inc.
The write-off reflects the continued exodus of viewers from cable networks like CNN to streaming, taking with them advertising revenue and subscriber fees.
The changes have rippled across media. Disney, which announced third-quarter results on Wednesday, reported declines in linear television advertising sales and subscribers.
In streaming, Warner Bros. added 3.6 million new subscribers, exceeding Wall Street’s expectations of 1.89 million. That brought the total to 103.3 million, also topping estimates. Ad revenue from streaming doubled to $240 million, beating analysts’ estimates of $191.38 million.
Warner Bros. has eliminated more than 2,000 positions over the past year and slashed 100 jobs at CNN last month. The company raised subscription prices for its Max streaming service in June.
For the quarter, Warner Bros. reported a net loss of $10 billion, which included additional charges of $2.1 billion related to its merger. Revenue for the quarter fell 6.2% to $9.71 billion.
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