Audiences continue to shift to streaming, with Warner Bros. exploring a $9.1 billion write-down of its TV network business (WBD.US)

Warner Bros. Discovery (WBD.US), the parent of CNN and TNT, reported a $9.1 billion non-cash goodwill impairment in the second quarter after writing down the value of its traditional TV networks.

The write-down reflected the continued shift of viewers from cable TV networks like CNN to streaming media, while also taking away the bulk of traditional TV's revenue streams from advertising sales and subscription fees.

Warner Bros. Discovery said the value of its cable TV channels like CNN and TNT had fallen since the $42 billion merger that completed in 2022, when Discovery acquired WarnerMedia.

The company's earnings report showed Q2 revenue of $9.71 billion, down 6.2% year-over-year and below expectations; net loss widened from $1.24 billion to $9.99 billion, including $9.1 billion in goodwill impairment and $2.1 billion in merger-related costs; loss per share was $4.07, down from $0.51 a year ago.

CEO David Zaslav said on a conference call with investors on Wednesday: "Two years ago, the market value of traditional media companies and their current state was very different than today. This impairment recognizes that and brings our book value closer to our future prospects."

Shares of Warner Bros. fell 9.9% in after-hours trading after the announcement, to $6.95, the lowest price since the company began trading as a combined entity in April 2022.

Last month, the NBA decided not to work with Warner Bros. anymore, ending its partnership with the company and instead awarding a $76 billion, 11-year media rights contract to Walt Disney, Comcast and Amazon. Warner Bros. sued the NBA last month, alleging it breached its contract.

Warner Bros. said in a statement that its streaming business added 3.6 million subscribers, above Wall Street's expectations of 1.89 million. That brings its total subscriber count to 103.3 million, above expectations as well. Streaming ad revenue more than doubled to $240 million, above analyst expectations of $191.4 million.

Warner Bros. has laid off more than 2,000 people in the past year, and 100 at CNN last month. The company raised the price of its Max streaming service in June.