“It’s safe to assume that the majority” of Warner Bros. Discovery’s roughly $37 billion in debt load will exist with the spun off Global Networks, the new company’s new CEO Gunnar Wiedenfels said on Monday. “A not-insignificant portion” will remain with Streaming & Studios, Wiedenfels said, which will remain under the eye of current WBD president and CEO David Zaslav.
“It’s too early to talk about a target capital structure. We haven’t made final decisions yet, and you know, there’s a lot we need to work through between now and when this when this deal closes,” Wiedendfels told media analysts on a conference call. “A couple of things can be said, though. Number one, it’s safe to assume that the majority of the debt is going to live with global networks and a smaller portion — but a not-insignificant portion — on Streaming & Studios as well.”
Wiedenfels, currently the WBD chief financial officer and Zaslav’s longterm right-hand man, expects his coming company, Global Networks, to “continue to see strong cash generation.” Though cable TV is dying, it still generates cash flow — especially CNN, which heads out with Wiedenfels.
At the end of March, Warner Bros. Discovery had gross debt of $38.0 billion, which is comprised of “total debt” ($37.4 billion) and financial leases ($535 million). The 2022 merger of WarnerMedia (owned by AT&T) and Discovery, Inc. created more than $50 billion of debt.
Earlier on Monday, June 9, Warner Bros. Discovery announced a split that most of the industry saw coming. There will be two independently-operated, publicly-traded companies: Streaming & Studios and Global Networks. Those will be renamed at some point (and probably “Warner Bros.” and “Discovery” — again).
The Streaming & Studios company will consist of Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO and HBO Max, as well as their legendary film and television libraries. The second business, Global Networks, will include entertainment, sports and news television brands around the world as CNN, TNT Sports in the U.S., and Discovery, free-to-air channels across Europe, and digital products such as the profitable Discovery+ streaming service and Bleacher Report (B/R).
David Zaslav, president and CEO of Warner Bros. Discovery, will serve as president and CEO of Streaming & Studios. Gunnar Wiedenfels, CFO of Warner Bros. Discovery, will serve as president and CEO of Global Networks. Both will continue in their present roles at WBD until the separation, which is expected to close in mid-2026.
“Three years ago, the very foundation of how, when, and where audiences engaged with content was undergoing fundamental change,” Zaslav wrote in a memo to staff, obtained by The Hollywood Reporter, in reference to the 2022 combination of WarnerMedia and Discovery. “As both organizations contemplated their futures, one truth became clear: to successfully adapt, transform, and lead in the entertainment industry of tomorrow, we needed to come together — to draw on each other’s strengths.”
Not that it was always easy.
“While the work since that merger has been challenging at times, ultimately, we have succeeded in strengthening each element of our business,” Zaslav said in the memo. “By bringing together the Discovery and Turner networks, we have created a leader in live and unscripted television, with a truly global footprint operating at industry-leading margins. We’ve transformed our direct-to-consumer offering, as HBO Max is now one of the world’s few global and meaningfully profitable streaming services. And by fusing creative brilliance with operational excellence, we have made strong progress in returning our film and television studios to industry leadership.”
More to come.
