The Powers That Be: Daily Zaslav’s Junk Era
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Jun 5, 2025 Bill Cohan, author of Puck's Dry Powder Newsletter and a Warner Bros. Discovery expert, joins Julia Alexander to tackle the financial turmoil plaguing Warner Bros. Discovery. They dive into the implications of a recent debt downgrade and stagnant growth in income. The discussion navigates CEO David Zaslav's controversial leadership approach, shareholder trust issues, and potential mergers on the horizon. Listeners gain insight into the company's operational changes and the turbulent future of streaming and linear content.
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Stagnant EBITDA Dynamics
- Warner Bros. Discovery's EBITDA is stagnant around $9 billion, despite dynamic shifts within segments.
- Streaming and studio earnings grow while linear TV earnings sharply decline, balancing overall performance.
Debt Downgrade's Strategic Benefit
- A debt downgrade to quasi-junk status ironically makes WBD debt more attractive to potential buyers.
- The downgrade means the debt isn't immediately repayable upon a change of control, easing acquisition concerns.
Legacy Media Prepares M&A Moves
- Media companies with legacy linear TV assets are positioning themselves for future merger and acquisition activity.
- WBD, Comcast, and others are taking steps like spinning off linear TV to prep for industry shifts.