| COMPANY |
Warner Bros. Discovery, Inc. |
| COURT |
United States District Court for the Southern District of New York |
| CASE NUMBER |
24-cv-09027 |
| JUDGE |
The Hon. Katherine Polk Failla |
| CLASS PERIOD |
February 23, 2024 through August 7, 2024 |
| SECURITY TYPE |
Securities |
LEAD PLAINTIFF DEADLINE IS JANUARY 24, 2025.
If you have suffered losses and would like to discuss your rights, please fill out this form or you may contact Jonathan Naji, Esq. at (484) 270-1453 or via e-mail at info@ktmc.com.
Case Background:
WBD’s television networks include TNT which has relied on basketball programming to drive ratings and revenue through its U.S. sports rights agreement with the National Basketball Association (“NBA”). Under its existing 2014 deal with the NBA, TNT paid an annual average fee of $1.2 billion. WBD was unable to reach a new deal with the NBA before its exclusive negotiating window expired in April 2024, allowing the NBA to negotiate with other companies for its sports rights content. The NBA reached a deal with other networks in July 2024, and rejected TNT’s matching rights to retain NBA programming.
The Class Period begins on February 23, 2024, when WBD issued a press release during pre-market hours announcing its fourth quarter and full year 2023 financial results. In the release, WBD indicated that the company had purportedly “execut[ed] against [their] strategic plan to reposition the company,” were “now on solid footing with a clear pathway to growth”, and “ha[d] an attack plan for 2024 that includes . . . further progress against [their] long-range financial goals” such that WBD “[we]re confident in [their] ability to drive sustained operating momentum and enhanced shareholder value.” WBD also emphasized the company’s Networks segment operating expenses, growth rate, and cost of revenues, and highlighted the company’s renewal rights discussions with the NBA, noting that the discussions were “constructive and productive.”
On August 7, 2024, WBD announced its second quarter 2024 financial results and revealed disappointing revenue of $9.71 billion, representing a 6.3% year-over-year decrease, missing consensus estimates by $360 million. WBD also revealed a net loss of approximately $10 billion because of a $9.1 billion non-cash goodwill impairment charge from its Networks segment. WBD disclosed that the goodwill impairment charge was triggered as a result of, among other things, the “uncertainty related to affiliate and sports rights renewals, including the NBA.” On this news, WBD’s Series A common stock price fell $0.69, or nearly 9%, from a close of $7.71 per share on August 7, 2024, to close at $7.02 per share on August 8, 2024.
The complaint alleges that, throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) WBD’s sports rights negotiations with the NBA were causing, or were likely to cause, the company to significantly reevaluate its business and goodwill; (2) WBD’s goodwill in its Networks segment had significantly deteriorated as a result of the difference between its market capitalization and book value, continued softness in certain U.S. advertising markets, and uncertainty related to affiliate and sports rights renewals, including with the NBA; (3) the foregoing significantly increased the likelihood of WBD incurring billions of dollars in goodwill impairment charges; (4) accordingly, Defendants had overstated WBD’s overall business and financial prospects; and (5) as a result of the foregoing, Defendants’ positive statements about the company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
What is a Lead Plaintiff?
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.