👉 Background: Warner Bros is the entertainment giant that was founded back in 1923. We're talking iconic movies like the Harry Potter Series, The Dark Knight, and The Matrix. In 2022 Warner Brothers merged with Discovery Channel, and its subsidiary channels, in a $43 billion USD deal.

👉 What happened: Now, Warner Brothers Discovery has written down its pay-TV business by a whopping $9.1 billion USD. That's because it reckons its cable channels aren’t worth what they used to be in this uncertain pay-TV market (thanks streaming services!).

👉 What else: This news sent Warner Brothers Discovery’s share price down 11% to its lowest price since these two companies merged. Sounds like this merger hasn’t quite panned out the way these two media companies had hoped.

What's the key learning?

💡Even the most well-planned and well-intentioned mergers have a chance of not reaching its potential.

💡Since Warner Brothers merged with Discovery Channel, its pay-TV audience has significantly reduced in size. Throw on top of that a mountain of debt, a softening ad market, and layoffs at the company last month.

💡This isn’t as uncommon as you’d think. According to the Harvard Business Review, mergers actually have a 70% chance of failure. But you can dramatically increase the odds of success, if you understand how to select targets, how much to pay for them, and how to integrate them.