Warner Bros. Discovery Now Sees $4 Billion In Post-Merger Cost Savings, Up From $3.5 Billion
Warner Bros. Discovery CFO Gunnar Wiedenfels today predicted the company will hit $4 billion in total cost savings from the merger of Discovery and Warner Media – up from a previous commitment to hit $3.5 billion.
The head finance exec delivered the update on a call to flesh out WBD’s mixed fourth-quarter financials. Widenfels and CEO David Zaslav were more upbeat than they have been in the past on the contours of the operational and financial prospects for the company, which is taking out billions of dollars in costs. The savings are accompanied by restructuring charges of $5.3 billion as it cancels and redirects content and pursues layoffs.
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The original promise from WBD executives was $3 billion in cost cuts. Big Discovery and now WBD shareholder John Malone had suggested early on in the deal that $4 billion was possible. And high-level insiders tell Deadline that the figure could even come closer to $5 billion.
Duplicative expenses run from tech, to advertising and distribution sales force and real estate.
The company had realized $1 billion of savings by the end of last year. The merger closed last April.
“The bulk of our restructuring is behind us,” said Zaslav at the top of the call. “We have full command and control of our business” and management is all “rolling in the same direction.”
Wienfels called the fourth quarter a “defining chapter” in the company’s global financial organization.
WBD saw revenue dip and losses widen for the last three months of 2022. But streaming losses narrowed sharply and free cash flow rose. Wiedefels said WBD will continue to chip away at its near $50 billion in debt, reaching net leverage investment grade level next year. Debt alone isn’t the key metric, leverage is. That’s measured by the debt-to-equity ratio — a company’s total liabilities divided by its shareholder equity.
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