29 SEP 2022

Is Warner Bros. Discovery open for a future sale?

Warner Bros. Discovery held a company-wide global town hall over Zoom where its CEO, David Zaslav, addressed some recent merger rumors and assured: “we are not for sale, absolutely, not for sale.”

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David Zaslav

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Warner Bros. Discovery held a company-wide global town hall over Zoom in which they laid out the current state of the company and the industry. In particular, the group’s CEO David Zaslav addressed some recent merger rumors and assured: “we are not for sale, absolutely, not for sale.”

This is according to sources on the Zoom, published on Deadline. The CEO did not specifically address which company he was referring to, but the assumption by many was that he was referring to Comcast. There was no mention of pending layoffs. “We have the strongest hand in the industry. We have everything we need to be successful to be the biggest entertainment media company in the world,”  Zaslav said.

Zaslav was joined in the room by HBO Chief Casey Bloys, Warner Bros. Film Chiefs Michael De Luca and Pamela Abdy, and Warner Bros. TV topper Channing Dungey. The executives acknowledged the “disruption and difficulty all media companies are facing” in the current environment, and also the “challenges in integrating WarnerMedia and Discovery,” noting that it is “difficult to say goodbye” to colleagues who left the company amid the reorganizations.

●  FALSE STATEMENTS?

Meanwhile, Warner Bros. Discovery and its top corporate brass are facing a shareholder lawsuit that alleges false statements were made about the health of the HBO Max streaming service and its subscriber numbers to pave the way for a merger this year, Los Angeles Times reported.

The proposed class-action lawsuit was filed last week in New York federal court by the Collinsville (Illinois) Police Pension Board, which held Discovery stock. The suit proposes to expand to include other Discovery shareholders who have watched the value of their holdings plummet after the US$43-billion merger of Discovery and AT&T’s WarnerMedia unit.

The lawsuit alleges Warner Bros. Discovery and its top executives, Chief Executive David Zaslav and Chief Financial Officer Gunnar Wiedenfels, violated Securities and Exchange Commission laws by allowing misleading statements to be contained in merger registration documents and a prospectus. The suit contends that Zaslav, Wiedenfels and others had an obligation to alert Discovery shareholders to the problems before shareholders voted in March to approve the merger.

The 31-page lawsuit contends that AT&T’s WarnerMedia subsidiary “overstated the number of subscribers to HBO Max by as many as 10 million subscribers”  because the firm included in the subscriber count AT&T customers who had received bundled access to HBO Max. However, those AT&T customers had not signed onto the HBO Max service, the lawsuit alleged.

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