Warner Bros Discovery (WBD) has written down the value of its traditional television networks by $9.1 billion. This dramatic revaluation demonstrates how quickly the streaming business is undermining the previous cable TV model of channels like CNN, HGTV, and the Food Network. The write-down resulted in the American entertainment company reporting a quarterly loss of $10 billion on Wednesday – significantly more than the $542 million expected by Wall Street and even exceeding the total quarterly revenue of $9.7 billion.

The revaluation is a clear sign that WBD's TV channels no longer hold the value they did two years ago when the company was formed through the merger of Discovery and WarnerMedia. "Two years ago, market valuations and conditions for traditional media companies were very different, and this writedown reflects that," CEO David Zaslav told investors. "Market conditions in the traditional business are tough.

Chief Financial Officer Gunnar Wiedenfels added: "It is an accounting reflection of the state of the industry." When asked if he was disappointed by the write-down, he replied: "Yes. There were discussions about a recovery in the traditional television market a year or a year and a half ago. However, this has not materialized.

The shares of WBD fell by 11.5 percent on Thursday in morning trading. Since the merger in 2022, which brought together two traditional media companies with a volume of 40 billion US dollars, the stock had already lost almost 70 percent of its value. The merger was intended to help survive the brutal competition in the streaming market.

The quarterly revenues fell short of expectations, particularly due to the decline in WBD's TV networks, which suffered significantly from shrinking viewership as more people canceled their pay-TV subscriptions. Revenues in WBD's TV business dropped by 8 percent year-over-year to $5.3 billion. Rival Disney also reported a 7 percent decline in TV network revenues to $2.7 billion for the quarter on Wednesday.

Zaslav and his team have discussed strategic options to stop the falling WBD stock price. A company split was considered but dismissed as not the best solution at the moment, as reported by the Financial Times earlier this week. On Wednesday, Zaslav told analysts: "We have to consider all options, but the top priority is to run this company as effectively as possible.

Positive news: The streaming business and HBO cable network gained 3.6 million direct subscribers in the quarter, bringing the total number of subscribers worldwide to 103.3 million. "We recognized early on that this is a generational disruption that requires bold, necessary steps," explained Zaslav.