Top line
Warner Bros. Discovery shares experienced one of their strongest trading days in recent months on Thursday after the media group announced a deal with Charter Communications to include the streaming service Max in standard cable packages.
Warner Bros. Discovery shares closed up 72 cents. (Photo illustration by Budrul Chukrut/SOPA … (+)
Key data
Warner Bros. Discovery shares closed up 10.3 percent at $7.66, recovering from recent losses that had pushed their price down to as low as $6.94 on Wednesday.
The company’s shares have risen more than 13% over the past month, but are well below their July peak when shares cost as much as $8.18 – and well below their 2021 high of over $77.
The deal between Warner Bros. Discovery and Charter will give Spectrum cable customers ad-supported versions of Max and Discovery+ at no additional cost, eliminating the $15 additional fee customers currently have to pay to add Max to their cable package.
Spectrum customers already have access to a $65 cable package that includes the basic plans of competing services Disney+ and Paramount+.
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Large number
More than 33%. That’s how far Warner Bros. Discovery shares have fallen since January, when they were trading at over $11.60.
Important background
Warner Bros. Discovery reported 103.3 million streaming subscribers in its second-quarter earnings report and added 3.6 million subscribers during the quarter. According to The Hollywood Reporter, Warner Bros. CEO David Zaslav said Thursday at a Goldman Sachs conference that the company expects Max to add six million subscribers in the final quarter. However, Warner Bros. Discovery has also experienced turmoil over the past year. The media conglomerate – formed by Discovery’s merger with AT&T-owned Warner in 2022 – is still heavily dependent on a rapidly declining cable TV business and is at risk of losing its longstanding media rights partnership between the NBA and cable broadcaster TNT. The company sued the league for not accepting its $1.8 billion offer, which matched an offer from Amazon Prime Video. Warner Bros. Discovery cited the potential loss of its NBA contract as one of the reasons for a $9.1 billion writedown on its struggling TV networks earlier this month, sending its share price falling to its lowest level of the year ($6.71).
tangent
The agreement follows a difficult quarter for Charter, which reported a loss of 393,000 TV subscribers in the second quarter, a massive increase from the 193,000 it lost in the same period last year. Video revenue fell 7.7% year over year, totaling $3.9 billion in the second quarter as the company continues to face pressure from cord-cutting. Further integrating emerging streaming platforms into its cable packages could help Charter offset some of its losses.
More information
As linear TV suffers revenue losses, WBD takes a $9.1 billion write-down (Forbes)
Disney, Warner Bros. Discovery and Fox join forces to offer sports streaming (Forbes)
