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David Zaslav, CEO and president of Warner Bros. Discovery (L), and John Malone, chairman of Liberty Media, Liberty Global, and Qurate Retail Group. CNBC | Reuters Warner Bros. Discovery‘s next step to gain scale may be looking at distressed assets. Chief Executive David Zaslav and board member John Malone both made comments this week suggesting the company is paying down debt and building up free cash flow to set up acquisitions in the next two years of media businesses suffering from diminished valuations. The targets could be companies flirting with or filing for bankruptcy, Malone said in an exclusive interview with CNBC on Thursday. While U.S. regulators may frown at large media companies coming together because of overlaps with studio, cable or broadcasting assets, they’ll be much more forgiving if the companies are struggling to survive, Malone told David Faber. “I think we’re going to see very serious distress in our industry,” Malone said. “There is an exemption to the antitrust laws on a failing business. At some point of distress, right, then some of the restrictions, they look the other way.” Media company valuations have been plummeting amid streaming video losses, traditional TV subscriber defections, and a down advertising market. This has affected Warner Bros. Discovery as much as its peers. The company’s market valuation recently fell below $23 billion, its lowest point since WarnerMedia and Discovery merged last year. The company ended the third quarter with about $43 billion in net debt. Warner Bros. Discovery is trying to position itself to be an acquirer, rather than a distressed asset, itself, by paying down debt and increasing cash flow, Zaslav said during his company’s earnings conference call this week. Warner Bros. Discovery has paid down $12 billion and expects to generate at least $5 billion in free cash flow…

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Filed under: News - @ November 9, 2023 11:14 pm