In early 2020, about 16 months before Discovery and WarnerMedia were merged in a $43 billion Reverse Morris Trust engineered by John Malone, David Zaslav purchased the late producer Robert Evans’ Beverly Hills home for $16 million. Evans lived in the 3,800-square-foot structure when he was at the height of his powers, and it was there that the Hollywood legend hammered out the deals that brought such films as Rosemary’s Baby, The Godfather and Chinatown to the big screen.

If the Zaslav property was the setting for Evans’ greatest triumphs, it’s also the place where the tanned, charismatic oddball’s personal and professional life came apart at the seams. As he recounted in his 1994 memoir The Kid Stays in the Picture, Evans’ cocaine use was prodigious to say the very least, and after he was busted for trafficking in 1980, his career went off the rails. (As part of his plea bargain, Evans agreed to produce Get High on Yourself, a one-hour anti-drug special/infomercial featuring the likes of Bob Hope, Mr. Bill and Andy Gibb. The ‘80s were weird.)

Evans died in 2019, and Zaslav has spent the better part of the last four years restoring the property. But for all the work that’s being done on the site, it’s Warner Bros. Discovery that may prove to be the real fixer-upper. Or maybe it’s a tear-down; on Wednesday, the day after Zaslav advised investors that WBD had recorded a $9.1 billion write-down on the value of its cable TV networks, the share price dropped to $6.73. Since the merger closed two years ago, the value of WBD’s stock has plummeted 72%.

Zaslav eased into the topic of the write-down about 18 minutes into WBD’s second quarter earnings call. “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,” Zaslav said, in acknowledgment of the pachyderm in the room. “This impairment acknowledges this and better aligns our carrying values with our future outlook.”

He went on to say that the pay-TV industry has been beset by a sort of “generational disruption,” although it’s clear that WBD’s woes go beyond the traditional cable bundle’s death-of-a-thousand-cuts.

Shortly after the NBA confirmed that it plans to move on from its multi-decade partnership with TNT, the stock price went into freefall, as investors began to grow concerned about how WBD brass would reckon with the loss of this top-shelf sports property. While WBD went on a compensatory buying spree once it became apparent that the NBA preferred to hitch its wagon to Amazon—the company has picked up a brace of College Football Playoff games from ESPN, and snatched up a Big East basketball package and the rights to the French Open—analysts remain doubtful that this dog’s breakfast will be sufficient to offset the absence of pro hoops.

If it will likely take some time before WBD faces real pushback on the pricing of TNT, investor sentiment seems to favor an inevitable devaluation of the company’s affiliate fees. Comcast’s carriage deal with the former Turner networks expires at the end of 2025, and even a modest reduction in the monthly sub fees could wreak havoc. Hypothetically, should Comcast manage to wrangle as much as a 25% rate reduction from TNT, that precedent would embolden every other operator looking to slash its own operating costs. In the early going, a universal reduction could very well amount to an annual loss of $621 million for TNT alone.

Of course, any loss in distribution revenue would only be compounded by parallel declines in subscriber counts. And the rate of attrition among bundled subs is showing no sign of abating, as cable, satellite and telco-TV operators lost 12% of their video customers in the first quarter of 2024. In the past six years, 40.7 million bundled subs have cut the cord, and even when the cheaper vMVPD packages are tossed into the mix, overall pay-TV penetration is still down to just 56% of all U.S. TV households.

Unfortunately for WBD and its investors, while Zaslav assured the Street that his team is taking the “bold, necessary steps” to turn things around, much of that ameliorative strategy seems to revolve around a direct-to-consumer business that doesn’t throw off anywhere near enough cash to offset the galloping declines on the linear-TV side of the ledger. WBD chief financial officer Gunnar Wiedenfels on Wednesday all but threw his hands up in the air when asked when streaming might pull the company out of the hole, telling one analyst that he is “not in a position to perfectly predict when this is going to happen.”

Wiedenfels went on to say that he is “disappointed about the impairment,” before dropping a couple of phrases that investors never want to heart during an earnings call. “It is what it is,” he said. “We’re managing this as best we can.”

Malone, who has served as Zaslav’s mentor for as long as anyone can remember, sits on the WBD board, where he remains extremely influential. In a May interview with Sportico, the celebrated “cable cowboy” did not seem convinced that splurging on an NBA renewal would necessarily be the best move for WBD.

“TNT would be spending the money defensively, because paying more for less NBA is not going to get them more customers,” Malone said. “It’s an awful lot of money for a long time into the future, and you’re making a bet that in three, five years the asset will still be as important as it is now. So, it’s a tough decision to write that check. An 11-year deal is a very tough decision.”

Well before WBD was elbowed aside by Amazon’s $20 billion bid, Malone suggested that the legacy cable outlets wouldn’t fare well in a war of attrition with the deep-pocketed tech barons.

“The big tech guys are just going to just continue to put numbers on the table that the traditional companies, broadcast or cable, will have a very hard time matching,” Malone said, adding that the inflation of rights fees has made the bundle prohibitively expensive for a large swath of consumers. “Sports rights are, generally speaking, overpriced. And so you have to keep raising your carriage fees in order to justify the cost of those rights, which will only accelerate the shrinking subscriber count. But big tech obviously doesn’t have to worry about the bundle.”

Ironically, WBD may have invited the tech vampire into the house toward the end of the 45-day exclusive negotiating window it shared with Disney. In a bid to get an early look at Amazon’s cards, one of Zaslav’s lieutenants is said to have encouraged the NBA to begin talking with the online retailer before the window slammed shut on April 22. While subsequent events may have left WBD ruing this course of action, it’s possible that the NBA had already decided to move on from TNT well before the spring talks ended in a stalemate.

According to one network executive who is unaffiliated with WBD, the NBA sprang a couple of surprise moves on the incumbent during the early stages of the negotiations, moving the goal posts on key deal points frequently enough to effectively disorient the WBD brain trust at every turn. (Or perhaps it’s all a matter of interpretation; a source with ties to the NBA dismissed the anecdotal claims as paranoia.)

However the negotiations went down, it’s unlikely that the courts will provide WBD with much in the way of satisfaction on the NBA rights front. Setting aside Malone’s concerns about paying much, much more for far, far less, the logistics of trying to force the league to submit to what amounts to an 11-year arranged marriage defy credulity. If nothing else, spending a ton of money on lawyers doesn’t seem to be the best use of resources for a company that’s still staring down $41.4 billion in gross debt.

Zaslav still has a fair amount of work to do on his Hollywood digs, but the job of fixing WBD—if such a task is even attainable—can’t be tackled quickly enough. For all that, after skirting a question about how the loss of the NBA might impact the company’s distribution revenue, Zaslav did his best to put a brave face on the matter.

“We are getting back to work,” Zaslav said near the end of Wednesday’s earnings call. “The judge will decide, and then off we’ll go.”