Warner Bros. Discovery said Wednesday it wrote down the value of its TV assets due to the uncertainty of fees from cable and satellite distributors and sports rights renewals, sending its shares down nearly 10% in extended trading.

The film and entertainment studio, which owns sports network TNT and streaming service Max, recorded a $9.1 billion non-cash goodwill charge in the second quarter. This charge, stemming from a reassessment of the assets’ value since the merger of WarnerMedia and Discovery, contributed to a $10 billion net loss for the quarter.

The media landscape has significantly changed in the past two years, impacting valuations and expectations for traditional media companies and this current situation is reflected in the write down, CEO David Zaslav said in a call with analysts.

Asked whether the company was considering hiving off assets, CFO Gunnar Wiedenfels said on the call: “We’ve said before, you shouldn’t be surprised to see us engaging in you know, whatever M&A processes are going on out there.”

The shift of viewers from traditional television to streaming services has led to a decline in advertising revenue and affiliate fees, impacting the profitability of Warner Bros. Discovery’s television assets. This decline is further compounded by the escalating costs of acquiring sports rights.

TNT failed to renew a broadcast deal with National Basketball Association games, at a time when live sports have become crucial for companies to increase viewership. The company sued the NBA last month.

Losing the lawsuit would accelerate the decline of its TV business, analysts said.

“The huge impairment charge from Warner Bros Discovery is essentially the final nail in the coffin of the traditional linear TV business,” said Bob O’Donnell, chief analyst at TECHnalysis Research.

Content revenue in Warner Bros Discovery’s studio segment fell 6%, as the game “Suicide Squad: Kill the Justice League,” released earlier this year underperformed, compared to last year’s top game “Hogwarts Legacy.”

Director George Miller’s much-awaited “Furiosa: A Mad Max Saga” underperformed at the box office following its release in May. The film raked in $67.5 million at the domestic box office, IMDb’s Box Office Mojo data showed, while it had a reported a budget of $168 million, according to analysts at TD Cowen.

The studio’s stock has shed a third of its value this year.

Not enough

Still, the company’s direct-to-consumer customer base grew thanks to its cheaper ad-supported offerings and expansion of the Max streaming service to new markets.

Global direct-to-consumer customers at the end of the quarter was 103.3 million, up from 99.6 million subscribers in the January-March period, and beating analysts’ estimates of 101.6 million, according to Visible Alpha data.

Revenue from advertisements on its direct-to-consumer platforms nearly doubled to $240 million, trouncing Wall Street expectations, due to higher engagement on the Max streaming platform and strong subscriber growth, the company said.

The company’s rival Walt Disney said on Wednesday that its Entertainment unit, including its streaming businesses Disney+, Hulu and ESPN+, recorded its first profit in the April-June quarter.

“Strong streaming subscriber growth is not enough to make up for weakening fundamentals, the loss of NBA broadcast rights, advertising weakness, and misses across free cash flow, revenue, EBITDA, and earnings,” said Michael Ashley Schulman, chief investment officer of Running Point Capital.

Excluding one time items such as the goodwill charge, the company’s loss was 36 cents per share, wider than estimates of 22 cents per share, according to LSEG data.

The media giant reported revenue of $9.71 billion in the second quarter on Wednesday, compared to analysts’ estimate of $10.07 billion.