Enhanced Strategic Focus and Flexibility Will
Better Position Storied Brands Across Entertainment, Sports and
News to Drive Shareholder Value
NEW
YORK, June 9, 2025 /PRNewswire/ -- Warner Bros.
Discovery (NASDAQ: WBD) (the "Company," "WBD," "we," "us," "our")
today announced plans to separate the company, in a tax-free
transaction, into two publicly traded companies, enabling each to
maximize its potential. 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. Global Networks
will include premier entertainment, sports and news television
brands around the world including CNN, TNT Sports in the U.S., and
Discovery, top 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.
"The cultural significance of this great company and the
impactful stories it has brought to life for more than a century
have touched countless people all over the world. It's a treasured
legacy we will proudly continue in this next chapter of our
celebrated history," said Zaslav. "By operating as two distinct and
optimized companies in the future, we are empowering these iconic
brands with the sharper focus and strategic flexibility they need
to compete most effectively in today's evolving media
landscape."
"This separation will invigorate each company by enabling them
to leverage their strengths and specific financial profiles. This
will also allow each company to pursue important investment
opportunities and drive shareholder value," said Wiedenfels. "At
Global Networks, we will focus on further identifying innovative
ways to work with distribution partners to create value for both
linear and streaming viewers globally while maximizing our network
assets and driving free cash flow."
"We committed to shareholders to identify the best strategy to
realize the full value of our exciting portfolio of assets, and the
Board believes this transaction is a great outcome for WBD
shareholders," added Samuel A. Di Piazza,
Jr., Chair of the Warner Bros. Discovery Board of Directors.
"This announcement reflects the Board's ongoing efforts to evaluate
and pursue opportunities that enhance shareholder value."
Building on the achievements realized over the past three years,
the planned separation will unlock value for shareholders as well
as create opportunities for both new businesses to thrive by:
- Equipping each to be faster and more aggressive in pursuing
opportunities that strengthen their competitive positions.
- Forming world-class management teams focused on creating
greater strategic flexibility and focus so that each business can
invest in and pursue its operational and financial goals.
- Enabling each company to be more agile and attract a
shareholder base aligned with its growth prospects and financial
profiles.
Streaming & Studios
With best-in-class creative capabilities and an unmatched
library of beloved IP, Streaming & Studios will be one of the
world's greatest storytelling companies. The company will be
comprised of Warner Bros. Television, Warner Bros. Motion Picture
Group, DC Studios, HBO and HBO Max (including its international
sports offering), Warner Bros. Games, Tours, Retail and
Experiences, as well as studio production facilities in Burbank and
Leavesden. Streaming & Studios will have dynamic and
sustainable revenue, profit and free cash flow growth. The company
will focus on continuing to scale HBO Max, which is now in 77
markets with important new market launches planned for 2026, and
build on its global momentum, investing in HBO's world-class
programming which differentiates and drives the platform, and
prioritizing the operating principles that have put the Studios on
a path back to their target of at least $3
billion in annual adjusted EBITDA.
Global Networks
Global Networks will encompass a powerful and preeminent global
portfolio of entertainment, sports and news television networks and
brands as well as their digital products. Today, these assets reach
1.1 billion unique viewers in 68 languages across 200 countries and
territories, while operating with industry-leading margins and
robust free cash flow conversion. As a worldwide leader in live
television, Global Networks will have the expertise, reach and
ongoing financial profile to pursue opportunities such as investing
in international growth opportunities, elevating its live content
offerings in sports and news, and growing digital extensions of its
strong network brands, such as Discovery+, B/R, and CNN's new
streaming offering.
Transaction Details, Capital Structure and Timing
Warner Bros. Discovery intends to separate the businesses in a
tax-free manner for U.S. federal income tax purposes. The
companies plan to implement arm's length transition services and
commercial agreements post-separation to facilitate the transition
and maintain continued operational efficiencies.
Each company will have well-capitalized structures to support
their businesses. In a separate press release today, Warner Bros.
Discovery announced the commencement of tender offers and related
consent solicitations across its existing capital structure to
enhance its debt portfolio, which will be funded by a committed
bridge facility of $17.5 billion
provided by J.P. Morgan. The bridge facility is expected to be
refinanced prior to the separation. Both companies will have a
clear path to de-leveraging with significant cash flow and strong
liquidity through cash and revolver availability. In addition,
Global Networks will hold up to a 20% retained stake in Streaming
& Studios that it will plan to monetize in a tax-efficient
manner to enhance the de-leveraging of its balance sheet.
The separation is expected to be completed by mid-2026, subject
to closing and other conditions, including final approval by the
Warner Bros. Discovery Board, receipt of tax opinions and/or a
private letter ruling from the Internal Revenue Service with
respect to the tax-free nature of the transaction for U.S. federal
income tax purposes, and market conditions.
J.P. Morgan and Evercore are serving as financial advisors to
Warner Bros. Discovery and Kirkland & Ellis LLP is serving as
legal counsel.
Webcast
The Company will conduct a conference call today at 8:30 a.m. ET to discuss the contents of this
release. A link to the live webcast of the conference call is
available in the "Investor Relations" section of the Company's
website at https://ir.wbd.com/.
Forward Looking Statements
Information set forth in this communication constitute
forward-looking statements within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include, without limitation, statements
regarding the Company's expectations, beliefs, intentions or
strategies regarding the future, and can be identified by
forward-looking words such as "anticipate," "believe," "could,"
"continue," "estimate," "expect," "intend," "may," "should," "will"
and "would" or similar words. These forward-looking statements are
based on current expectations, forecasts, and assumptions that
involve risks and uncertainties and on information available to
Warner Bros. Discovery as of the date hereof.
Forward-looking statements include, without limitation,
statements about the benefits of the separation, including future
financial and operating results, the future company plans,
objectives, expectations and intentions, and other statements that
are not historical facts. Such statements are based upon the
current beliefs and expectations of WBD's management and are
subject to significant risks and uncertainties outside of our
control. Among the risks and uncertainties that could cause actual
results to differ from those described in the forward-looking
statements are the following: the occurrence of any event, change
or other circumstances that could give rise to the abandonment of
the separation or pursuit of a different structure; risks that any
of the conditions to the separation may not be satisfied in a
timely manner; risks that the anticipated tax treatment of the
proposed separation is not obtained; risks related to potential
litigation brought in connection with the separation; uncertainties
as to the timing of the separation; risks and costs related to the
separation, including risks relating to changes to the
configuration of WBD's existing businesses; the risk that
implementing the separation may be more difficult, time consuming
or costly than expected; risks related to financial community and
rating agency perceptions of WBD and its business, operations,
financial condition and the industry in which it operates; risks
related to disruption of management time from ongoing business
operations due to the separation; failure to realize the benefits
expected from the separation; the final terms and conditions of the
separation, including the terms of any ongoing commercial
agreements and arrangements between Streaming & Studios and
Global Networks following such separation; the relationship between
Streaming & Studios and Global Networks following the
separation; the nature and amount of any indebtedness incurred by
Streaming & Studios and Global Networks; effects of the
announcement, pendency or completion of the separation on the
ability of WBD to retain and hire key personnel and maintain
relationships with its suppliers, and on its operating results and
businesses generally; risks related to the potential impact of
general economic, political and market factors on WBD as it
implements separation; risks related to obtaining permanent
financing to refinance the bridge facility on favorable terms in a
timely manner or at all; and risks related to the tender offers and
consent solicitations, including that the conditions to completion
of the tender offers and consent solicitations, and funding under
the bridge facility, are not satisfied.
WBD's actual results could differ materially from those stated
or implied, due to risks and uncertainties associated with its
business, which include the risks related to the separation, tender
offers and consent solicitation. Discussions of additional
risks and uncertainties are contained in WBD's filings with the
Securities and Exchange Commission, including but not limited to
WBD's most recent Annual Report on Form 10-K and reports on Form
10-Q and Form 8-K. WBD is not under any obligation, and each
expressly disclaims any obligation, to update, alter, or otherwise
revise any forward-looking statements, whether written or oral,
that may be made from time to time, whether as a result of new
information, future events, or otherwise. Persons reading this
communication are cautioned not to place undue reliance on these
forward-looking statements which speak only as of the date
hereof.
Additional Information about the Tender Offers and Consent
Solicitations and Where to Find it
This communication is for informational purposes only and is
neither an offer to purchase nor a solicitation of an offer to sell
any securities. The tender offers and related consent solicitations
referred to in this communication are being made only by, and
pursuant to the terms of, the Offer to Purchase and Consent
Solicitation Statement, dated June 9,
2025 (the "Offer to Purchase and Consent Solicitation
Statement"). The Offer to Purchase and Consent Solicitation
Statement will be sent to registered holders of such debt
securities and be posted online at www.dfking.com/WBD. The
information contained in, or that can be accessed through this
website is not a part of, or incorporated by reference
herein. The tender offers and consent solicitations do not
constitute an offer to buy or the solicitation of an offer to sell
securities in any jurisdiction in which such offer or solicitation
is unlawful.
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SOURCE Warner Bros. Discovery, Inc.
