☀️ WBD 2024: The Losses, Strat Changes & What’s Next
A special #EarningsSeason 🤓 'Wakeup' looking inside WBD's Q4 2024 books
So, this was arguably among the top WBD earnings calls since the creation of the company — not because the numbers were amazing per se (overall they weren’t — more on that shortly), but more that the communication about what the company is, and its strategy for the road ahead, was far better.
Wall Street seems to agree, putting WBD stock +9% this morning.
Also, opening the call with just 4 minutes from Zaz and going right to Q&A may have helped (sorry CFO talk fans — maybe next quarter . . . although Gunnar certainly made up for that in the Q&A).
But fellow deal hawks (good afternoon Richard!), some notes to, uh, note here up top:
NOTE 1: WBD, DISNEY and NBCU have all now had unusually short opening comments on their Q4 earnings calls. I’m sure Rushfield and I will dive into what this portends on the podcast tomorrow.
NOTE 2: WBD reiterated how it has secured essentially all of its cable TV network carriage deals (5 of the top 6) in multi-year deals.
i.e. 👋 Potential deal partners — no looming question marks here about this business!
Other than the unknown rate of #cordcutting decline — something management did not even try to sugarcoat this time out, also a positive sign.
BTW: Linear TV ad revenue was -16% YoY in Q4, and overall ad revenue -11%. 😳
NOTE 3: WBD really has gotten that debt down, paying off $19B in less than 2 years.
Leverage now stands at 3.8x (WBD’s eventual target is around 3x or a little below, but no real timeline there).
Now, diving into the numbers — there really are a lot of insights that indicate the direction of the company ahead that management is going in . . . a company whose 3 parts each also have a different narrative right now.
There’s also a notable larger strategy shift afoot, whose drivers are very much worth looking at and likely based on insights that are somewhat unique to WBD given its moves to date.
But let’s start off here with that change from execs on the earnings call that stood out the most: no more boasting that WBD rules cable TV viewership . . . or hemming and hawing on a sports strategy (VENU, NBA back and forth, etc.) . . . or simply having any question as to what this company is about: