new York
CNN
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David Zaslav had a particularly tough day.

The head of Warner Bros. Discovery watched his company’s already weak stock price plunge more than 10% in after-hours trading on Wednesday afternoon, hitting a dangerous new low of $6.90 after the company announced second-quarter results.

The sell-off came after WBD took a $9.1 billion write-down on its struggling network assets, a reflection of how quickly the traditional television business is weakening, putting at risk companies like WBD that get the majority of their revenue from linear channels. WBD owns some of the most prominent cable channels, including CNN, HGTV, TNT and TBS – all of which are seeing a worrying decline in their viewership as cable elimination reduces overall viewership and reach per household.

For WBD, the legacy company’s rapid decline in recent weeks has been exacerbated by its very public split with the NBA, its partner for four decades, which turned into a legal battle after the media giant tried to use its matching rights to snap up Amazon’s newly acquired $1.8 billion-a-year gaming package.

The only bright spot in the traditional television business is live sports broadcasts, which continue to generate high viewership despite increasing cable TV shutdowns. WBD, which is now suing the NBA over its divorce, acknowledged Wednesday that the potential loss of games starting in the 2025-26 season will have a financial impact on the company.

“The goodwill impairment was triggered in response to the difference between market capitalization and carrying value, the continued weakness in the U.S. linear advertising market and the uncertainty related to the renewal of partnerships and sports rights, including the NBA,” WBD said in its financial review.

To be fair, WBD is not the only once-successful media giant struggling to find its footing in a landscape transformed by the Netflix revolution. Paramount Global, a former titan, has stumbled and struggled tremendously to pivot its business to streaming. The Shari Redstone-led company, which last month struck a merger deal with David Ellison’s Skydance, has lost 27% of its value this year.

In a candid conversation with investors at the company’s earnings call on Wednesday, Zaslav acknowledged the grim reality of the television business.

“It’s fair to say that market valuations and conditions for traditional media companies two years ago were very different than they are today,” Zaslav said. “And this impairment reflects that.”

While Zaslav spoke about other parts of WBD’s business, describing the company’s Max streaming platform as “doing very, very well” with “tremendous potential,” even as he expressed that positive sentiment, Zaslav acknowledged the cold reality of “tough conditions in the traditional business.”

The hole WBD is currently in has led to enormous rumors that the company will be forced to sell some of its assets. During Wednesday’s earnings call, Chief Financial Officer Gunnar Wiedenfels said management is “well aware of its responsibility to keep all strategic options in mind.”

“We are clearly focused on evaluation beyond just running the operational business,” said Wiedenfels. “As we have said before, you should not be surprised if we get involved in the ongoing M&A processes. You should not be surprised if we get involved in partnership discussions.”

However, WBD has shown some reluctance to sell its key assets, and whether the company can get out of the predicament it is in without such a move may prove difficult.