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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Warner Bros Discovery has written down the value of its traditional television networks by $9.1bn, a dramatic recognition of how fast streaming is eroding the cable business model behind channels such as CNN, HGTV and the Food Network.

The non-cash charge led the US entertainment group to on Wednesday report a quarterly net loss of $10bn, which compared to Wall Street’s expectations of a $542mn loss and exceeded its total revenue of $9.7bn.

The stark revaluation reflects a determination that WBD’s television channels are no longer what they were worth just two years ago, when the company was formed from the merger of Discovery and WarnerMedia.

“It’s fair to say that even two years ago, market valuations and prevailing conditions for legacy media companies were quite different than they are today, and this impairment acknowledges this,” chief executive David Zaslav told investors. “The market conditions within the traditional business are tough.”

“It’s an accounting reflection of the state of the industry,” said chief financial officer Gunnar Wiedenfels.

“Am I disappointed about the impairment? Yes,” Wiedenfels said. “There’s been talk about recovery [in the traditional television market] a year, or year and a half ago. It hasn’t really happened.”

Shares in WBD were down 10.5 per cent in pre-market trading on Thursday morning. The company’s stock had already fallen by almost 70 per cent since it was formed in 2022 in a $40bn merger that was meant to help two legacy media groups survive the brutal streaming battle.

Quarterly revenue fell short of forecasts, weighed by WBD’s television networks, which were hit hard by shrinking audiences as people cancel their pay-TV subscriptions.

Revenue at WBD’s television business unit dropped 8 per cent from a year ago to $5.3bn. Rival Disney reported earlier on Wednesday that its television network revenue fell 7 per cent to $2.7bn in the quarter.

Zaslav and his team have been discussing strategic options as they try to reverse WBD’s sinking share price. They considered breaking up the company but have concluded that this is not currently the best option, the Financial Times reported earlier this week.

Zaslav on Wednesday told analysts: “We have to . . . consider all options. But the number one priority is to run this company as effectively as possible.”

The group’s streaming and HBO cable businesses added 3.6mn direct-to-consumer subscribers in the quarter, reaching 103.3mn subscribers globally. 

“We recognised early on this was a generational disruption . . . requiring us to take bold, necessary steps,” said Zaslav.

PARIS — A feud between the world’s leading sports anti-doping organizations just escalated again.

This time, U.S. officials face accusations they improperly allowed American athletes to compete in “elite level” events after tests showed they used performance-enhancing drugs. Deals were struck with at least three athletes if they agreed to serve as informants and cooperate in on-going doping investigations. Reuters first reported the practice.

The World Anti-Doping Agency (WADA) says the U.S. Anti-Doping Agency (USADA) ran a rogue operation that turned athletes into “undercover agents.”

“WADA did not sign off on this practice of permitting drug cheats to compete for years on the promise that they would try to obtain incriminating evidence against others,” the organization said in a statement.

According to WADA officials, when they learned of the practice by USADA in 2021, they ordered the Americans to “desist.”

This salvo from international anti-doping officials based in Montreal, Canada, comes after WADA itself faced growing criticism for its handling of positive drug tests involving 23 Chinese swimmers.

WADA kept the positive drug tests taken in 2021 and 2022 secret, allowing the Chinese athletes to keep competing, at the Tokyo Summer Olympics and again at the Paris Games this year.

In a statement, USADA CEO Travis Tygart said WADA is raising concerns over the secret use of American athletes in its investigations as a “desperate and dangerous” effort to smear critics.

According to Tygart, WADA was “aware of the athletes’ cooperation” in probes of sports doping and knew some athletes had been allowed to return to competition.

USADA said in its statement athletes who worked undercover while still competing “provided intelligence” to U.S. federal law enforcement and anti-doping investigators that eventually led to criminal charges.

“When USADA and other anti-doping organizations obtain information about misconduct and potential violations,” Tygart said, “it’s critical that we pursue the truth with all the resources at our disposal.”

According to both organizations, the practice of allowing proven sports cheaters to continue competing, in exchange for cooperation, is no longer in use.

This fight comes as USADA’s Tygart has emerged as a chief public antagonist of WADA, calling for major reforms to the world’s premier anti-doping organization. The U.S. Congress opened a probe and the FBI also launched a criminal investigation.

WADA and the International Olympic Committee have punched back, arguing that U.S. officials have overstepped their authority. The IOC threatened last month that Salt Lake City’s hosting of the 2034 Winter Games could be revoked if U.S. probes and criticism continue.

As this diplomatic fight between the world’s most powerful sports organizations grows more bitter, many American athletes say they no longer trust the system designed to preserve fair, drug-free competition.

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Australian airline Qantas has cut bonuses due to its former chief executive Alan Joyce by more than A$9.3mn (US$6mn) to reflect damage done to its reputation in the last year of his tenure.

The decision is the outcome of a review launched in 2023 into management actions and the culture at the carrier known as the “Flying Kangaroo”, in a year when its share price crashed as it was found to have sold “ghost flights” and illegally sacked 1,700 workers.

Joyce, who quit last year after 15 years at the helm. was the main target for passenger and investor ire as it was revealed that the Irish executive was due to receive a leaving package of up to A$24mn. That triggered a shareholder rebellion with more than 80 per cent voting against its pay policy at its annual meeting last November.

The review, published on Thursday and conducted by McKinsey partner Tom Saar, found there was “too much deference to a long-tenured CEO” at Qantas and that a “command and control” leadership style under Joyce was a part of the “root cause” that underpinned the crisis that hit the company in 2023. It added that the board was “financially, commercially and strategically oriented” but should have also focused on employees and customers.

As a result of the review’s recommendation, the Qantas board opted to slash Joyce’s short-term and long-term bonuses because of the reputational damage done to the company during the post-pandemic period.

The board cut short-term bonuses paid to top executives by a third — equating to A$4.1mn including nearly A$1mn due to Joyce — to reflect issues at the airline. It also decided that Joyce’s entire long-term incentive bonus — due between 2021 and 2023 but as yet unpaid — of about A$8.4mn, would be forfeited.

Joyce was not immediately available for comment on the decision.

John Mullen, who will replace corporate veteran Richard Goyder as chair of Qantas in September, said the pay adjustments and leadership review would allow the new management team to “restore pride” in the airline.

“It’s important that the board understands what went wrong and learns from the mistakes of the past, as it’s clear that we let Australians down,” Mullen said.

Joyce had repeatedly defended his actions, and potential bonus, pointing to the airline’s rapid financial turnaround after it flew close to collapse during the pandemic.

A decision to sack 1,700 ground and baggage staff during that period was later deemed to be illegal and preceded a customer service meltdown that infuriated passengers. Last year, the corporate regulator sued the airline for selling tickets for flights it had already cancelled. That triggered a 20 per cent drop in its share price and Qantas eventually admitted it had misled customers. It is paying an A$100mn penalty as a result. 

Michael Kaine, national secretary of the Transport Workers’ Union, said there were early signs that Qantas had improved its ways but slammed Joyce over what he called the “destruction of an Australian icon”.

“This review is important because it verifies what workers, passengers and the Australian community have been saying for years: Qantas was a corporate dictatorship with a timorous board incapable of speaking up to Alan Joyce as CEO, who prioritised a toxic ‘profit at all costs’ culture,” Kaine said.

Qantas, now led by Vanessa Hudson, has invested heavily in improving its customer service and reliability. Its position in the lucrative domestic aviation market has been maintained, despite its woes, after low-cost competitor Bonza collapsed and regional airline Rex entered administration this year.