What had been obvious "to the rest of us" for years, is finally official: late last night, shares of Warner Bros. Discovery, the parent of CNN and TNT, crashed 10% to the lowest level on record after it reported dire results, which missed across the board and plunged across every income statement category...

... but the biggest hit - and surprise - was the company's stunning $9.1 billion charge taken to write down the value of its traditional TV networks, such as CNN and TNT, which were acquired in 2022 when Warner Bros Discovery was created as part of its acquisition of WarnerMedia. The write down confirmed that legacy cable channels like CNN and TNT are no longer worth what they were when the $42 billion merger was completed. In fact, judging by the ongoing mass layoffs at the former, one can argue that CNN's value is now negative and will continue to be so until it stops hemorrhaging cash.

For the quarter, Warner Bros. reported a net loss of $10 billion, which included additional charges of $2.1 billion related to its merger. Revenue for the quarter fell 6.2% to $9.71 billion. Of note, the revenue collapse in the company's Networks segment, which includes CNN, just won't stop.

"Two years ago market valuations and prevailing conditions for legacy media companies were quite different than they are today," CEO David Zaslav said on a call with investors on Wednesday. "This impairment acknowledges this and better aligns our carrying values with our future outlook."

As Bloomberg notes, the writedown follows last month's decision by the NBA to drop Warner Bros. as a broadcast partner and award a $76 billion, 11-year media rights deal to Walt Disney, Comcast and Amazon.com. Warner Bros. filed a lawsuit against the NBA last month alleging a breach of contract.

"At this point, we've handed it off to our lawyers," Zaslav said on the call. "We have confidence in our position."