Warner Bros. Discovery has become the third largest streaming media powerhouse behind Netflix (NFLX) and Disney (DIS) — and operates with the following segments: Advertising, Distribution and Content Generation (together contributing 65% to revenues at $33.8 billion in FY23E). In addition, the fast-emerging Subscription (Direct to Consumer) business (contributing 35% to revenues at $18.2 billion in FY23E), contains such brands as Discovery, Food Channel, HGTV, TLC, Animal Planet, HBO, CNN, Cartoon Network, Adult Swim, Boomerang, Warner Bros., and many others.
We anticipate dividend-focused selling pressure. With ex-parent AT&T paying a good dividend yield of about 6% and a 1.5% stake (108m shares outstanding) being held by dividend focused funds, with WBD not expected to pay any dividends in the near-term, we calculated close to 26m shares of selling to take place.