{"id":11281,"date":"2023-11-08T19:20:56","date_gmt":"2023-11-08T19:20:56","guid":{"rendered":"https:\/\/infundpros.com\/business\/warner-bros-discovery-shares-dive-after-warning-over-debt-target\/"},"modified":"2023-11-08T19:20:56","modified_gmt":"2023-11-08T19:20:56","slug":"warner-bros-discovery-shares-dive-after-warning-over-debt-target","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=11281","title":{"rendered":"Warner Bros Discovery shares dive after warning over debt target"},"content":{"rendered":"<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=60e146f9-1f69-404b-bed8-f7613b1fd57c\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Warner Bros Discovery shares were on course for their biggest daily drop in more than two years after the entertainment group warned investors it was \u201cunlikely\u201d to meet its goals for paying off debt. <\/p>\n<p>The company behind HBO, CNN and the Warner Bros movie studio has been focused on cutting costs and trimming its debt following the $40bn merger of Warner with Discovery last year and against the backdrop of a rising interest rate environment. <\/p>\n<p>That deal gave the newly combined group\u00a0more heft in a high-stakes battle with\u00a0Netflix, and consolidated power under chief executive David Zaslav. But it left WBD with a debt pile of $55bn. <\/p>\n<p>Chief financial officer Gunnar Wiedenfels warned on Wednesday that his previous target \u2014 achieving a debt-to-adjusted earnings ratio of between 2.5 and 3 times next year \u2014 was now \u201cunlikely\u201d because of a tough advertising market and the lingering impact of the Hollywood labour strike. <\/p>\n<p>\u201cIt is unlikely from today\u2019s perspective, that we will hit our target leverage range by the end of 2024 without a meaningful recovery of the TV ad market,\u201d said Wiedenfels.\u00a0<\/p>\n<p>The television ad market had been \u201cdisappointing\u201d, while there was a \u201creal risk at this point\u201d that the labour strike, which has halted TV production, will continue to hurt WBD\u2019s finances in 2024, Wiedenfels warned. <\/p>\n<p>\u201cIt is becoming increasingly clear now, that, much like 2023, 2024 will have its share of complexity\u201d, he said. <\/p>\n<p>Shares in WBD were down more than 17 per cent in Wednesday afternoon trading on Wall Street, putting them on track for their biggest daily drop since March 2021.<\/p>\n<p>Since the Federal Reserve began raising interest rates in 2022, Wall Street has become sceptical of Hollywood\u2019s growth-orientated streaming revolution and is focused on profits.<\/p>\n<p>Wiedenfels, a former McKinsey consultant from Germany, has built a reputation for his ability to squeeze expenses and generate profit. Under his watch, WBD had managed to pay off $12bn in debt since the deal closed last year, the company said on Wednesday. WBD had $43bn in net debt at the end of September.<\/p>\n<p>WBD earlier this year changed its pay structure, tying Zaslav\u2019s bonus to his success in generating cash and reducing the company\u2019s leverage.<\/p>\n<p>Wiedenfels said the \u201cvast majority\u201d of WBD\u2019s\u00a0remaining debt had a fixed interest rate, which should \u201cinsulate\u201d the company from rising rates.\u00a0 <\/p>\n<p>His warning came as the group reported that its streaming business had turned a profit in the most recent quarter, while the overall company had narrowed its net loss to $417mn from a $2.3bn loss a year ago. WBD\u2019s quarterly revenue was up 2 per cent from a year ago to $10bn.<\/p>\n<p>WBD\u2019s global streaming subscriber base, however, dropped by 700,000 to 95.1mn in the quarter, which Zaslav blamed on a light content slate. <\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/60e146f9-1f69-404b-bed8-f7613b1fd57c\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Warner Bros&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":{"0":"post-11281","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Warner Bros Discovery shares dive after warning over debt target | inFundPros<\/title>\n<meta name=\"description\" content=\"Unlock the Editor\u2019s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Warner Bros Discovery shares\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/infundpros.com\/?p=11281\" \/>\n<meta property=\"og:locale\" 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