Warner Bros Discovery is exploring a sale of its music library that could be valued at more than $1 billion (€920 million), according to people familiar with the matter, the latest move by chief executive David Zaslav to reduce debt at the sprawling Hollywood empire.
Since taking control after combining WarnerMedia with his Discovery last year, Mr Zaslav’s team has been scouring the entertainment group — which spans HBO, the Warner Bros movie studio and CNN — to find places to cut into its $50 billion in debt.
The Warner Bros movie studio created a music division in the 1950s. In 2004, parent company Time Warner sold the music division, but the group retained its copyrights to a trove of songs, such as the soundtracks to the Batman films.
Warner is shopping around this catalogue to potential buyers as it tries to capitalise on a hot market for music copyrights, said three people familiar with the matter. The assets could be worth more than $1 billion, one of the people said.
The process is in early stages and any deal would hold stipulations over access to and use of certain soundtracks, said one person close to the situation.
The move comes after Mr Zaslav’s team has axed prominent projects such as the CNN Plus streaming service, JJ Abrams’s HBO series Demimonde and the movie Batgirl during the final stages of its production.
Chief financial officer Gunnar Wiedenfels earlier this month defended these decisions. “We shaved off a lot of the excess last year, and I think that’s something that everyone else in the industry is going to go through,” he told an investor conference. “We’re coming from an irrational time of overspending with very limited focus on return on investment.
“We are just consistently and continuously looking at how we’re running the business...What makes sense? What doesn’t make sense?”
After a bruising 2022 when the stock lost more than half of its value, shares in Warner Bros Discovery have increased by more than a third this year, as investors bet that the worst is over in terms of losses and restructuring costs.
“At this point, the majority of heavy lifting (related to restructuring charges etc) has been completed,” said Bank of America analyst Jessica Ehrlich. - Copyright The Financial Times Limited 2023
