Warner Bros. Discovery to spend more than $1 billion downsizing and reducing
SAN DIEGO — The world’s leading media company is undergoing a big-time downsizing.
On the bright side, it’s good news if you like a good crisis.
The company, which is headquartered in New York, has seen its annual revenue slump by about 50 percent over the past two years. Wall Street analysts expect its revenue to dip 10 percent to $3 billion this year and then to down to $2.5 billion in 2009.
It’s a lot of money for a company that has been struggling to find a place on the Internet.
But it gets worse: the company is preparing to downsize its staff by 15 percent by the end of this year. Some 1,000 employees could be affected, and it will cut 3,000 TV jobs and close another 8,000 positions.
The company has been losing money for years. In June, its second quarter was a “loss” of $8 million.
The good news? The company has another $2 billion in the bank.
Discovery Communications, after a run of losses in the past few years, has a solid balance sheet and no debt. But it is in peril of running out of cash.
The company has also run up billions of dollars in debt with a host of bad financing deals and is trying to raise another $90 million by selling some of its cable channels and Web properties to the Dish Network.
And if those sales don’t go through, the company will have to decide whether to pay for the rights to the Discovery Channel’s live football games — which would be a big blow to the cable channel’s reputation.
The company, which was founded in 1968, has become the world’s biggest cable provider and is now the No. 1 pay-TV provider. Yet it’s