Warner Bros. Discover Breaking Up Isn't Hard To Do

Core Viewpoint - Warner Bros. Discovery (WBD) is unwinding its $43 billion merger completed in 2022 due to challenges in achieving synergies and declining performance in traditional media channels [1][2] Group 1: Merger and Financial Performance - The merger aimed to create a streaming powerhouse to compete with Netflix and Disney+, but has not met expectations [1] - WBD has incurred a total debt of $37 billion, which has hindered its ability to invest in growth and led to significant cost-cutting measures, including the cancellation of major productions [2] - Since the merger, WBD's stock has declined from around $25 to below $10, reflecting investor dissatisfaction with the merger's outcomes and management decisions [3] Group 2: Corporate Restructuring - The separation into two distinct firms will allocate the majority of WBD's $37 billion debt to the new "Global Networks" company, which will include assets like CNN and TNT Sports [4] - A smaller portion of the debt will remain with "Streaming & Studios," which will house properties such as Warner Bros. and HBO [4] - WBD has secured a $17.5 billion bridge loan to buy back existing bonds, aiming to reduce expenses through this restructuring [4]