NEW YORK - Warner Bros. Discovery, Inc. (NASDAQ:WBD) announced today the authorization by its Board of Directors for a new corporate structure aimed at increasing strategic flexibility and potentially unlocking additional shareholder value. The media giant will now operate under two distinct divisions: Global Linear Networks and Streaming & Studios.
Global Linear Networks will encompass a range of well-known television networks, delivering news, sports, and both scripted and unscripted programming. Meanwhile, Streaming & Studios will manage a large streaming platform alongside renowned film and entertainment studios, housing a collection of globally recognized intellectual property.
The company's President and CEO, David Zaslav, stated that since the merger which formed Warner Bros. Discovery, they have not only transformed their business but also improved their financial standing while continuing to provide top-tier entertainment globally. While InvestingPro data shows the company operates with a moderate debt level of $40.2 billion, its overall Financial Health Score remains GOOD, indicating resilient fundamentals. Zaslav emphasized that the new structure will foster organizational alignment and enhance flexibility in strategic planning, which is expected to contribute to momentum building and shareholder value. For deeper insights into WBD's financial health and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
The implementation of this new structure is set to begin immediately, with completion targeted by mid-2025. This move is anticipated to allow each division to focus on its respective strategic and operational objectives, with Global Linear Networks aiming to maximize profitability and free cash flow, and Streaming & Studios driving growth and returns on invested capital.
Financial advisory services for this corporate restructuring are being provided by J.P. Morgan, Evercore, and Guggenheim Securities, with legal counsel from Kirkland & Ellis and Wachtell Lipton.
Warner Bros. Discovery is a prominent global media and entertainment company, offering a wide array of branded content across various platforms, reaching audiences in over 220 countries in 50 languages. This reorganization is part of the company's ongoing strategy to adapt to the dynamic media landscape and to enhance its capacity to generate value for shareholders. The information regarding this strategic move is based on a press release statement from Warner Bros. Discovery.
In other recent news, Warner Brothers Discovery has experienced significant developments in its financial outlook and strategic moves. Guggenheim maintained a positive outlook on the company, increasing the stock's price target while keeping a Buy rating. This adjustment followed a finalized multi-year, multi-market distribution agreement with Comcast (NASDAQ:CMCSA), leading to higher Networks Distribution revenue forecasts and raised Direct-to-Consumer subscriber estimates. Additionally, the company's advertising revenue estimates were increased, and an adjusted EBITDA forecast was raised.
Benchmark also reaffirmed a Buy rating on Warner Brothers Discovery following a significant distribution renewal agreement with Xfinity and Sky UK. KeyBanc Capital Markets maintained an Overweight rating on the company, reflecting confidence in the potential for higher profitability in its Studios and Direct-to-Consumer segments.
Moreover, Warner Brothers Discovery has launched two new advertising solutions, Shop with Max and Moments, powered by KERV.ai's technology. These solutions aim to enhance the streaming experience by integrating shoppable content.
Wolfe Research upgraded Warner Brothers Discovery's stock from Underperform to Peer Perform, citing potential benefits from industry trends and the growth of the company's Max streaming service internationally. Lastly, despite challenges, Warner Brothers Discovery remains optimistic about the Studio's profit rebound in 2025, driven by improved film performance, TV production momentum, and a recovery in gaming.
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