Warner Bros. Discovery (WBD) is facing increasing scrutiny from analysts who are urging the company to take drastic measures to improve its financial performance in the evolving landscape of cord-cutting. Jessica Reif Ehrlich, a media analyst at Bank of America, believes WBD needs to consider significant changes, ranging from spinning off its streaming service Max to exploring potential mergers or asset sales according to a report from Deadline.
WBD’s stock has plummeted 70% since its 2022 merger, prompting Ehrlich to suggest separating Max into a debt-free entity, leaving the traditional studio brands to shoulder the existing debt. This move could potentially revitalize the streaming platform and attract new investors.
Ehrlich also advocates for merging WBD with another company or selling off assets to bolster its financial standing. While previous merger talks with Paramount fell through, there have been discussions about a potential merger between Max and Paramount+, possibly resulting in a new jointly-owned entity. However, these talks have yet to yield any concrete results.
The challenges faced by WBD underscore the difficulties traditional media companies encounter in adapting to the cord-cutting era. As analysts grow increasingly concerned about the future of such companies, they are pushing for bolder and more innovative strategies to achieve profitability.
It remains to be seen whether WBD will heed these calls for change and implement any of the proposed solutions. For now though the voices calling for them to do something grow.