It may not have registered on the scale of the Moon landing, the “MASH” finale or the denouement of “Survivor” Season 1, but this was an incredibly momentous week for the business of television. The parade of second quarter earnings reports for major showbiz conglomerates made it crystal-clear that there is no more avoiding the 800-pound gorilla on the balance sheets of Big Media. It’s been a long time coming that the valuations long applied to old-fashioned cable channels have to be slashed by double digits.
And that’s what happened this week with Warner Bros. Discovery taking its eye-popping $9.1 billion write-down on the valuation of its core cluster of advertising-supported channels (think TNT, TBS, Cartoon Network, Discovery, Animal Planet, Food Network).
Paramount Global did the same thing a day later, slicing $6 billion from the valuation of its MTV group outlets (think MTV, VH1, Comedy Central, Paramount Network). AMC Networks buttoned up the week Friday by taking a $97 million charge to reflect the diminished returns coming from BBC America and its international cable channels. To be clear, the decision to take these charges doesn’t mean those outlets incurred billions of dollars in losses in the March to June span of the quarter.
To use WBD as an example, it means that $9.1 billion is the calculation made to reconcile past profit projections with the harsh reality of the actual revenue and earnings being generated. The level of profit that these channe.