Box office smash “Barbie” helped Warner Bros Discovery top core quarterly profit estimates but the effects of two Hollywood strikes and a weak advertising market could hamper earnings into next year, company executives said on Wednesday.
The dour outlook sent the company’s shares tumbling over 14%.
Although Hollywood’s film and television writers ratified a new three-year contract in September, ending their 148-day work stoppage, members of the SAG-AFTRA actors union have been on strike since July, roiling the industry’s 2024 film slate and depriving media companies of new content to sell.
Chief Financial Officer Gunnar Wiedenfels on a call with investors said there’s a “real risk” that the financial hit from the strike will linger into 2024.
“It is becoming increasingly clear now that much like 2023, 2024 will have its share of complexity, particularly as it relates to the possibility of continued sluggish advertising trends,” Wiedenfels said. “We don’t see when this is going to turn.”
Chief Executive David Zaslav said the company saw its lightest original content slate in years and had to delay some releases, leading to a drop in third-quarter streaming subscriber numbers.
Wiedenfels said that for full-year 2023 there will likely be a few hundred million dollars of a negative impact on EBITDA due to strike impacts, and several hundred million dollars of positive cash flow as a result of not being able to spend on production.
“The extreme success of the Barbie movie may be a one-off for them that won’t be repeated for at least a few years,” said Michael Schulman, chief investment officer at Running Point Capital.
The media company, forged by the union of WarnerMedia and Discovery, posted third-quarter adjusted core earnings of $2.97 billion, above estimates of $2.92 billion, according to LSEG data. Overall revenue of $9.98 billion was in line with estimates.
The company reported free cash flow of $2.06 billion, compared with $1.72 billion in the prior quarter. This surpassed expectations for $1.74 billion, according to Visible Alpha.
The company posted a net loss of $417 million, narrowing from a $2.3 billion net loss from a year-ago period.
“The market is not thrilled with the fact that even with the unparalleled blockbuster success of Barbie, they still found a way to lose $417 million in the quarter. Not ideal,” Great Hill Capital Chairman Thomas Hayes said.
Advertising revenue at its networks segment declined 12% to $1.71 billion as global conflicts and inflation created an uncertain climate for marketers.
The company’s streaming unit posted an adjusted core profit of $111 million, compared with a loss of $634 million a year ago. Global average revenue per user in the segment rose 6%.
Warner Bros Discovery had 95.1 million global direct-to-consumer customers at the end of the quarter, down from 95.8 million in the previous quarter.
In May, it launched its Max streaming service — combining HBO Max’s scripted entertainment with Discovery’s reality shows.
The company lost 17 cents per share, larger than estimates for a loss of 6 cents.
At least one person has died after a car was driven into a group of pedestrians in the western German city of Mannheim – with a large police operation under way.
Several people have been “seriously injured” after the black vehicle rammed into crowds, according to German police, with a witness telling Reuters they saw people lying on the ground and two being resuscitated.
A suspect has been taken into custody, police spokesperson Stefan Wilhelm added, warning people who live nearby to stay inside their homes.
Mr Wilhelm said that the “incident” unfolded on Monday at around 12.15pm local time in a pedestrianised part of Mannheim’s Paradeplatz area.
Image: Forensics officers examine the damaged car near Mannheim’s Rhine Bridge. Pic: DPA/AP
Image: Armed police examine the scene where the car was abandoned. Pic:DPA/AP
Image: Mannheim is around 50 miles south of Frankfurt
“We can confirm that one perpetrator was arrested,” he said. “We can’t yet give information on whether there were further perpetrators.”
A spokesman for the German interior ministry said: “The focus is now on saving lives, treating the injured and the initial investigations by the authorities in Mannheim.”
Armed police and forensic investigators were seen examining a black vehicle with smashed windows near the city’s Rhine bridge.
Image: Emergency services in the Paradeplatz area of Mannheim. Pic: AP
Image: Pic: DPA/AP
Image: Paradeplatz, Mannheim. Pic: Reuters
Image: Emergency services patrol the scene after the incident. Pic: Reuters
Image: Mannheim is around 50 miles south of Frankfurt
Police described it as “a life-threatening deployment situation”, saying in an initial statement: “Currently, a police operation is taking place in the city center of Mannheim, in the area of Wasserturm/Plankenkopf.
“Police and rescuers are on the way. Further information is not yet available. In this context, there may be temporary traffic disruptions in the inner city.”
An alert was issued on the Katwarn smartphone app – used in major emergencies – telling people in Mannheim to avoid the city centre due to a big police deployment.
Image: Police vehicles at the scene. Pic: Reuters
Mannheim University Hospital said it is prepared for a possible “mass casualty incident”, implementing its disaster and emergency plan, and increasing intensive care capacity, according to German news agency DPA.
A total of eight trauma teams have been made available – for both adults and children, according to the agency.
“Postponable operations that had not yet begun were immediately removed from the operation plan in order to create additional operating capacity,” the hospital said in a statement.
Image: Emergency workers stand by in Mannheim city centre. Pic: DPA/AP
Crowds have been gathering in cities across Germany, including its Rhineland region, for parades to mark the carnival season.
Police were on high alert after social media accounts connected to Islamic extremist groups called for attacks on events planned in Cologne and Nuremberg.
Interior minister Nancy Faeser said she cancelled her appearance at the Cologne parade due to the events in Mannheim.
Led by the UK and France, the initiative could see troops from a number of European and NATO countries deployed to Ukraine as peacekeepers in order to deter Vladimir Putin from rearming and attacking again in the future.
The countries committed to working together on this deal would form a “coalition of the willing”.
Countries in the coalition could end up sending soldiers to act as peacekeepers in Ukraine in the event of a ceasefire.
Military analyst Michael Clarke said: “It has to be a coalition of the willing because you have at least two NATO members – Slovakia and Hungary – who are vetoing anything that Putin would not like… it’s the same with the EU.”
This approach would allow NATO members to act in a group but not under the NATO umbrella, avoiding vetoes from member states who don’t approve or don’t wish to be involved.
Sir Keir’s choice of the term “coalition of the willing” is also interesting. It’s perhaps intended to remind an American audience of a previous use of the same phrase: when the UK, Poland and other countries joined the US invasion of Iraq.
Russia has so far rejected the idea of any NATO or European peacekeeping force in Ukraine.
Image: Map of military personnel by country, based on NATO estimates.
Who’s in?
Sir Keir is being “quite coy about who the willing are”, Prof Clarke said.
The initiative is being led by the UK and France, so it seems a safe bet that both countries would be involved in the coalition.
Both have powerful militaries and the two nations are also the only countries in Europe with nuclear weapons.
“The important thing is that Britain and France are going to lead it because they are the two most important military powers in Europe,” Prof Clarke told Sky News.
It is notable that France’s President Emmanuel Macron originally raised the possibility of French troops in Ukraine last year, when he refused to rule it out.
Image: An F-16 aircraft releases flares during a NATO exercise over Poland. Pic: Reuters
The Baltic states – Estonia, Lithuania and Latvia – are also likely to be involved, along with Finland, Prof Clarke says. All four countries are in NATO and share borders with Russia.
Italy could be involved too, Prof Clarke said, though Prime Minister Giorgia Meloni has clashed with Mr Macron over the idea last week.
Not in Europe but a NATO member, Canada seems another potential contributor to the coalition of the willing.
Prime Minister Justin Trudeau, when asked about a potential deployment of troops as part of a peacekeeping force, said yesterday: “Canada has looked at the ways it can best help and as I’ve said a few days ago, everything’s on the table.”
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3:52
The Ukraine summit: How the day unfolded
Who’s out?
Prof Clarke said Poland, Spain and Germany are not expected to send troops as peacekeepers, for different reasons.
Poland has one of the strongest militaries in Europe and aims to spend 4.7% of its GDP on defence this year, well above the NATO target.
But it also has a long border with Ukraine and Belarus and is concerned about its own security.
Polish Prime Minister Donald Tusk last month said: “We do not plan to send Polish soldiers to the territory of Ukraine.”
“We will… give logistical and political support to the countries that will possibly want to provide such guarantees in the future, such physical guarantees.”
Image: Italy’s Giorgia Meloni has been critical of plans to send troops to Ukraine
Spain’s foreign minister Jose Manuel Albares said last month that it was “too early at the moment to talk about deploying troops in Ukraine”, in remarks quoted by AFP.
He added: “There is no peace at the moment, and the effort has to be to achieve it as soon as possible.”
Spain’s government has faced a number of crises at home and spends around 1.28% of GDP on defence, well below the NATO 2% target.
As the biggest economy in Europe, Germany is a crucial part of any united response to the Ukraine war.
But a new government has not yet been formed after last month’s elections.
Image: Incoming German Chancellor Friedrich Merz. Pic: Reuters
Outgoing Chancellor Olaf Scholz has previously ruled out sending German troops to Ukraine as peacekeepers.
While his government has provided substantial support to Ukraine since the full-scale invasion, he has been seen by some as hesitant – for example resisting calls to send the vaunted Taurus missiles to Kyiv.
Friedrich Merz, who is expected to replace him as chancellor once the new government is in place, has taken a harder line, including on pledging Taurus missiles, so it remains to be seen if his attitude on deploying troops will also deviate from his predecessor.
‘Coalition of the willing’ is a curious term to revive
The use of the term “coalition of the willing” to describe the nations that agree to support an international force to help protect any ceasefire deal in Ukraine is interesting and notable.
It could perhaps be an attempt by Sir Keir Starmer to appeal to an American audience as this was the phrase the United States used for its “coalition of the willing” to invade Iraq more than two decades ago.
That intervention ended in disaster, triggering a bloody insurgency and locking the US and its allies into a costly war, despite the successful toppling of Saddam Hussein.
But reviving the words “coalition of the willing” will – if nothing else – remind Washington that London was its biggest and strongest backer when it turned to allies to back its 2003 invasion.
What about America?
The elephant in the room is the biggest contributor to NATO: the US.
For example, of the 5,015 fighter and fighter ground-attack aircraft in NATO, 2,951 of them are from the US, and a further 1,108 are US-made, according to the International Institute for Strategic Studies thinktank.
And America’s military is not just the largest in the world, but its ability to support troops in the field in terms of logistics is very hard to replace.
The coalition of the willing initiative seems designed to show President Donald Trump that Europe is serious about shouldering the defence burden and taking on more responsibility for the defence of Ukraine.
It should be pointed out that while the US is the single biggest donor to Kyiv, Europe as a whole has pledged more, according to the Kiel Institute for the World Economy thinktank.
The hope seems to be that the coalition of the willing initiative would persuade the US as the world’s most powerful military to pledge support as a backstop, to underwrite the peace deal.
It’s unclear so far what Washington’s response will be, particularly after the fiery recent meeting between Mr Trump, vice president JD Vance and Mr Zelenskyy.
The world’s most prolific blood donor, whose plasma saved the lives of more than 2.4 million babies, has died in Australia.
James Harrison “generously” donated his plasma almost 1,200 times from 1954 until 2018 and was known as the “man with the golden arm”.
Described as a “humanitarian” who was “proud” to have saved so many lives, he died aged 88 at a nursing home, according to his family.
Born in New South Wales, Mr Harrison was “determined to give back” after receiving many lifesaving transfusions following lung surgery when he was 14.
His plasma was found to contain a rare antibody which was then used to develop medicine to prevent newborns dying from Rhesus disease.
The medicine, anti-D, is given to pregnant mothers whose rhesus negative blood is at risk of attacking the baby’s rhesus positive blood.
During more than 60 years of donating blood, Mr Harrison never missed an appointment, said Australian Red Cross Lifeblood – and he holds the Guinness World Record for the number of donations.
When he stopped donating in 2018 because he had passed the age limit, he said he would still give blood if he was allowed.
Australian Red Cross Lifeblood chief executive Stephen Cornelissen said Mr Harrison was “committed to a lifetime of giving”.
“It was James’ belief that his donations were no more important than any other donor’s and that everyone can be special in the same way that he was.”
He added: “James extended his arm to help others and babies he would never know a remarkable 1,173 times and expected nothing in return.”
Lifeblood said Mr Harrison’s blood “may continue to save lives” as researchers are working with his and other donors’ plasma to grow the rare antibody in laboratory conditions.