'19 Kids and Counting' cancelation leads to $24M Discovery charge
Discovery Communications has taken charges of $24 million primarily for the cancelation of TLC reality show 19 Kids and Counting.
The cable networks group in its second-quarter earnings report on Tuesday cited "restructuring and other charges" in that amount without detailing all the items they covered, compared with $5 million for the year-ago period, an increase of $19 million.
Analysts said the figure was likely to account for ending the show amid the Josh Duggar scandal, with CFO Andy Warren later confirming that on an earnings conference call.
Photos of the Duggar family:
In his prepared remarks, he cited "higher restructuring and other charges this year of $19 million primarily due to content impairment charges from cancelling TLC's 19 Kids and Counting."
MoffettNathanson analyst Michael Nathanson also mentioned the figure in a first review of Discovery's latest earnings, which explained why they came in below his and Wall Street expectations despite better-than-expected earnings before interest, taxes, depreciation and amortization amid cost savings.
"Higher other losses (which includes currency impact) and $24 million in restructuring from the cancelation of 19 Kids and Counting (not included in segment earnings before interest, taxes, depreciation and amortization) offset the higher profitability leading to the earnings per share miss," he wrote.
In the fourth quarter, Discovery had taken impairment charges for Here Comes Honey Boo on TLC and Sons of Guns on the Discovery Channel.
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