Warner Bros. Discovery Share Price Tanks After Massive Impairment Charge

Warner Bros. Discovery's stock price fell as much as 12% in early trading after the company reported disappointing second-quarter earnings that missed expectations on both the top and bottom lines, as reported by Alexandra Canal for Yahoo Finance.

Warner Bros. Discovery has filed a lawsuit against the league over what it claims was the NBA's "unjustified rejection" of the company's matching rights proposal. I Photo: Mohd Fazlin Mohd Effendy Ooi Flickr

The company took a massive $9.1 billion impairment charge related to its TV networks unit following the loss of a key media rights deal with the NBA.

Warner Bros. Discovery has filed a lawsuit against the league over what it claims was the NBA's "unjustified rejection" of the company's matching rights proposal. Including an additional $2.1 billion in costs related to its merger, the company took an $11.2 billion hit in write-downs and charges last quarter.

Despite adding nearly 4 million subscribers in the quarter, the company reversed earlier profit trends in its streaming business, while its linear TV unit continued to decline.

Wall Street analysts weighed in on the report, with at least one suggesting that it's "unlikely" things can get worse for the media giant. KeyBanc analyst Brandon Nispel, who has an Overweight rating on the shares, noted that the company's studios business will likely perform better in 2025 compared to 2024, while streaming could continue to offset accelerated declines in the linear network.