Warner Bros.-Discovery’s Q4 earnings announcement capped off a tumultuous year with mixed results at the newly formed media giant. WBD experienced a significant drop in revenues at its studio division and from advertising sales. This was offset somewhat by a reduction in expenses from its streaming operations, which also saw a slowdown in signups from new subscribers.
A significant reason for the reduction in expenses was CEO David Zaslav’s decision to axe a number of high-profile series such as WESTWORLD and movie releases such as BATGIRL. These cancellations were part of a broader restructuring that also included layoffs, with bottom-line savings on the order of $3.5B. Even with ad revenue declining by 17%, box office grosses falling from the year before, and adding only 1.1M new streaming subscribers, Wall Street rewarded the company for posting a profitable quarter.
This was in stark contrast with the negative cash flow reported by major media sectors rivals such as Paramount and Disney. This is further evidence that investors have come to value profits above all else, a stark reality that Zaslav acted on quickly after assuming the reins at the combined company.