Comment on Warner Bros. Discovery To Split Into Two Companies, Streaming & Studios And Global Networks
ExtantHuman@lemm.ee 1 week agoYeah the fact that all of the debt is staying with the merged company is tipping their hands. This is what Venture Capitalist companies do. This is why JoAnn fabrics is going under.
Buy the company, somehow move the debt for the loan to buy the company onto the books of the company being bought. Fail to make up for those loan payments after a few years and then skin it off, only to have it shutter.
golli@lemm.ee 6 days ago
I definitely agree that this is a big problem happening way too often, but not sure if it is the case here.
First of all we need to remember that the majority of debt came from AT&T splitting off Warner and saddling it with billions of debt, not from the Discovery side at their merger or the split now. Secondly as i understand it the linerar networks are obviously the declining assets, but still the ones with more profit/revenue.
That makes it a judgment call whether one believes that those will be able to pay off this debt, before they become irrelevant. This might indeed involve cost cutting measures and negative effects, but who would invest in this business today? So long as there are no public bailouts involved i’d be fine with letting the debt holders judge by themselfes if they are fine with this (i assume they had a say in allowing this?). I guess this might be sad for CNN and some of the sports programs, but i feel like most people here won’t care too much what happens with the likes of TCL or HGTV.
The part we probably care more about (Warner/HBO) is the one getting the clean slate. Whether they try to make it work as a studio with streaming service on its own or try to sell it to someone else we will see. So presumably not a situation like JoAnn fabrics or Toys’R’Us where a liked company was saddled with debt and bled dry.