Warner Bros. Discovery (WBD) Investor Update summary

Strategic rationale and business transformation

• Warner Bros. Discovery will separate into two independent, publicly traded companies—Streaming & Studios and Global Networks—by mid-2026 to enhance focus, flexibility, and shareholder value.

• Each company will have its own management team and board, enabling tailored strategies and faster decision-making.

• The separation is structured as a tax-free transaction, with both entities positioned to compete independently in a rapidly evolving media landscape.

• The move follows significant integration and operational improvements since the original merger, including $19 billion in debt reduction and $5 billion in non-content-related synergies.

• The separation aims to attract investor bases aligned with each company's growth prospects and financial profiles.

Business segment outlooks and growth plans

• Global Networks will focus on live sports, news, and entertainment, with leading positions in key markets and a strong digital-first opportunity, including CNN's digital transformation and Discovery+.

• Streaming & Studios will prioritize scaling HBO Max internationally, investing in premium programming, and targeting at least $3 billion in annual adjusted EBITDA.

• Warner Bros. Studios aims for $3 billion-plus adjusted EBITDA, leveraging a robust content library and disciplined production framework.

• Experiences and games divisions are positioned for growth, with new Harry Potter attractions and a focus on billion-dollar gaming franchises.

• Each company will have world-class management teams to drive strategic flexibility and operational excellence.

Capital structure, financials, and transaction details

• Both companies will be well-capitalized, supported by a $17.5 billion bridge facility from J.P. Morgan to aid the transition and planned refinancing before separation.

• Global Networks will retain up to a 20% stake in Streaming & Studios, to be monetized tax-efficiently to aid de-leveraging.

• A cash tender and consent solicitation for ~$35.5 billion of outstanding bonds is being launched, with the tender structured into six pools and offering premiums and junior lien options to bondholders.

• The majority of debt will reside with Global Networks, while Streaming & Studios will also carry a significant portion; both are expected to have strong liquidity and clear deleveraging paths.

• The transaction is subject to board approval, tax rulings, and market conditions, with completion targeted for mid-2026.