Warner Bros Discovery is shifting in direction of a possible breakup, CNBC reported Thursday, as media firms discover choices for his or her struggling cable TV companies and sharpen deal with their faster-growing streaming and studios divisions.
The corporate’s shares surged greater than 4% on the information, rebounding from earlier losses of almost 6% triggered by a dour quarterly report.
Warner Bros Discovery missed first-quarter income estimates and posted a larger-than-expected loss earlier within the day on account of a sluggish field workplace efficiency and ongoing declines in cable.
It didn’t instantly reply to a Reuters request for touch upon the CNBC report, which cited unnamed sources.
WBD laid the groundwork for a doable sale or spinoff of its declining cable TV property in December by asserting a separation from its streaming and studio operations.
It reported outcomes below the brand new construction for the primary time on Thursday.
A break up would align WBD with Comcast, which is spinning off the fading NBCUniversal cable TV networks, together with MSNBC and CNBC, to place itself for development within the streaming period.
Analysts have lengthy speculated a few break-up of WBD, whose property embody CNN, HBO and the coveted Warner Bros studio.
Financial institution of America analysis analyst Jessica Reif Ehrlich mentioned final yr that WBD’s cable tv property are a “very logical partner” for Comcast’s new spin-off firm.
Like others within the media enterprise, Warner Bros Discovery is shedding 1000’s of cable TV subscribers every year, placing stress on the corporate to persistently produce hit content material and increase profitability in its streaming enterprise.
The specter of US tariffs on foreign-made movies has additionally added to the complications of an business whose biggest-budget movies are sometimes produced throughout a number of continents.
Studio weak point
Within the January-March quarter, WBD struggled to duplicate the success of final yr’s “Dune: Part Two,” which grossed greater than $700 million.
The corporate’s marquee launch for the interval, Bong Joon Ho’s sci-fi darkish comedy “Mickey 17,” earned solely barely greater than its reported price range on the field workplace.
That meant studios income fell 18% to $2.31 billion, lacking estimates of $2.73 billion, in accordance with Seen Alpha.
The corporate has, nevertheless, made a robust begin to the second quarter with Ryan Coogler’s horror movie “Sinners” and the blockbuster “A Minecraft Movie,” which has raked in round $900 million globally, making it the most important launch of 2025 to date.
Its summer season lineup additionally seems sturdy with “Superman,” directed by Marvel’s long-time hitmaker James Gunn, set to launch in July.
Income on the TV networks phase, which incorporates CNN, Discovery Channel and Animal Planet, fell 7% within the quarter.
General, income fell 10% to $8.98 billion, lacking analysts’ common estimate of $9.60 billion, in accordance with information compiled by LSEG.
Lack of 18 cents per share was additionally bigger than expectations for a 13-cent loss.
Nonetheless, its streaming enterprise was a brilliant spot.
WBD added 5.3 million streaming subscribers within the quarter, in contrast with 3.1 million estimated by analysts, in accordance with Seen Alpha, taking its whole to 122.3 million.
The quarter featured some sturdy content material slate together with the third season of HBO’s “The White Lotus” and the medical drama sequence “The Pitt.”
