Warner Bros. Discovery (WBD), the multinational media and entertainment giant, secured revenues of $9.98 billion during the third quarter (Q3) of 2023, a 1% increase year-on-year (YoY).
The heavyweight’s Networks segment, which includes the Eurosport pan-European network, brought in income of $4.87 billion during the three months up to September 30, down 7% YoY from the equivalent period in 2022.
Indeed, revenue decreased across the distribution, advertising, and content sectors of that segment.
Content revenue fell by 22%, with WBD saying that drop was due to “lower third-party licensing deals and lower international sports sub-licensing,” although this was partly offset by “higher inter-segment content licensing to direct-to-consumer [DTC].”
Eurosport’s portfolio of rights includes the Paris 2024 Olympics, tennis’ Australia Open and French Open grand slams, FIS World Cup skiing, cycling's Tour de France, La Vuelta, and Giro d’Italia, and motor racing’s Formula E and Le Mans 24 hours.
Other revenue, however, increased by 51%, mainly due to “services provided to the unconsolidated TNT Sports joint venture.”
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That is the new name for the UK pay-TV broadcaster formerly known as BT Sport, with the brand change having been effective from August.
The Networks operating expenses came to almost $2.5 billion. Costs of revenues decreased YoY by 6%, with this decrease down to “lower international and regional sports network [RSN] rights fees.”
Q3 saw WBD extend a carriage deal with global sports streaming service DAZN until 2026, as well as confirm a plan to exit the RSN business in the US by the end of this year.
Networks’ adjusted earnings before interest, taxation, depreciation, and amortization (EBITDA) came to $2.39 billion, down 9% YoY.
The DTC segment of WBD, meanwhile, which contains the Discovery+ streaming service – which will be a major broadcaster of Paris 2024 in various European markets – secured a revenue increase of 5% in Q3. Income rose YoY from $2.32 billion to $2.43 billion.
The revenues for distributing and advertising across that sector both rose, by 5% and 29% respectively, although content-related revenue suffered a 17% decrease.
The total number of DTC subscribers across the various WBD streaming platforms fell to 95.1 million, a decrease of around 700,000 since the end of Q2.
52.6 million of these were domestic subscribers, with the other 42.5 million being provided from WBD’s various international markets.
Operating expenses across DTC came to $2.32 billion, a 21% decrease, while adjusted EBITDA came to $111 million, a substantial YoY improvement of $745 million.
As a whole, the net loss available to WBD during the third quarter was $417 million, with adjusted EBITDA increasing YoY by 22%, to $2.97 billion. During Q2, the net loss had been $1.2 billion.
David Zaslav, president and chief executive at WBD, said: “I am very pleased with the strong financial results that our company delivered in Q3 … Among the highlights, our DTC business had another profitable quarter with $111 million of adjusted EBITDA.
“We’ve made great strides in just 19 months and are excited to continue building on this strong momentum, as we focus on driving future growth and creating long-term value for our shareholders.”
In terms of recent activity, mid-October saw WBD announce it would launch its Max direct-to-consumer streaming service across Europe in the first half of 2024.
During a keynote speech at the trade show Mipcom in Cannes, France, WBD International president Gerhard Zeiler said more than 20 countries across Europe would be offered Max, with the initial rollout to include the Nordics, Spain, Portugal, the Netherlands, and Central and Eastern Europe.
A “second wave” later in 2024 will see the service launched in other parts of Europe, including France and Belgium, while key Asian-Pacific markets will also likely gain access next year.
WBD first launched Max in the US earlier this year, combining the content of both HBO and Discovery+ into a single service. A rollout in Latin America is planned for later this year, meanwhile.
The company then added a sports tier to the platform in September.