- CEO of Warner Bros. Discovery David Zaslav spoke Tuesday at the RBC Global TIMT 2022 conference in New York.
- Zaslav said the advertising market was weaker than ever during the 2020 coronavirus pandemic.
- Zaslav said Discovery’s merger with WarnerMedia was “more confusing” than expected.
The advertising market is currently weaker than ever during the coronavirus pandemic slowdown in 2020. Warner Bros. Discovery This was announced on Tuesday at an investment conference by CEO David Zaslav.
If the ad market doesn’t improve next year, it “will be difficult” to reach the company’s $12 billion projected profit for 2023, Zaslav said at the RBC Global TIMT conference in New York.
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Zaslav’s comments signal a change in the rhetoric of major traditional media executives, who used to say this summer that a decline in advertising didn’t matter much to them, even as digital media players noticed a pullback. Advertisers cut costs as the Federal Reserve raised interest rates to bring down inflation, putting pressure on stocks, including media companies.”
According to Zaslav, things have gotten “much worse” over the past few months.
Cost of Warner Bros. Discovery has halved this year. Other advertising reliant companies such as Click, Meta as well as buzzfeedall are down over 65% this year.
Discovery’s merger with WarnerMedia earlier this year brought a number of unforeseen problems as some assets were “unexpectedly worse than we thought,” Zaslav said.
According to Zaslav, HBO went from earning over $2 billion in 2019 to losing about $3 billion last year due to a spike in content spending. The CEO has changed course for HBO Max as it looks to merge with Discovery+ next year, including ditching low-rated shows and big-budget movies made only for the streaming service.
“It’s dirtier than we thought, it’s a lot worse than we thought,” Zaslav said. However, he added that he did not want to buy a company “that is really well managed” because that would limit the potential for a merger. Zaslav has been cutting costs since closing the deal in April and plans to lay off more than 1,000 employees before the end of the year, CNBC reported last month.
Zaslav also said that Warner Bros. Discovery will be disciplined as discussions for an NBA renewal kick up next year.
“We don’t need the NBA,” Zaslav said. He added that the company has plenty of sports offerings without him.
However, Zaslav reiterated that he would like to make a deal with the NBA. He recently extended his contract with star television host Charles Barkley for 10 years., although the contract includes a clause that Barkley could leave if Warner Bros. Discovery will not renew the carriage agreement. The NBA’s contracts with national television will expire after the 2024/25 season.
Any deal with the NBA needs to be future-oriented, Zaslav said, including the company’s streaming service and sports assets. including bleach reportthat reach a younger audience.
Shares of Warner Bros. Discovery fell more than 1% on Tuesday.
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