Drag from Warner Bros. Discovery TV business makes strong argument for sale or split

By Lukas I. Alpert

Despite double-digit growth from film studio on the back of 'Superman' success, WBD books net loss and 6% revenue decline as merger talks swirl

Warner Bros. Discovery CEO David Zaslav says the company is seriously reviewing merger offers while continuing to plan for a spinoff of its television unit next year. (Photo by Patrick T. Fallon / AFP)

Even "Superman" couldn't turn the story around for Warner Bros. Discovery.

With the company reporting disappointing third quarter earnings, booking a net loss and declining revenues, the argument for accepting one of several acquisition offers or proceeding with a spinoff of its struggling television business, only gets stronger.

Despite a big quarter at its movie studio business driven by the success of a remake of "Superman" which brought in $616 million worldwide, a 22% drop in revenue at its television unit and flat growth from its streaming business proved to be too much of a drag.

In all, Warner Bros. Discovery Inc. (WBD) reported a loss of $148 million and 6% decline in revenue to $9.05 billion from $9.6 billion in the same quarter last year.

The company said the net loss was impacted by $1.3 billion of pre-tax acquisition-related amortization of intangibles, content fair value step-up, and restructuring expenses.

Subscribers to the company's HBO Max streaming service grew by 2.3 million to 128 million, but revenue from the unit was flat at $2.63 billion.

Warner Bros. Discovery shares were down just under 1% in pre-market trading.

The disappointing quarter comes as the media giant, home to HBO and CNN, says it has received interest from "multiple parties" about a sale of all or part of the company and that its board is reviewing all options.

That inbound interest came after Warner Bros. Discovery announced plans to spinoff its linear television business from its studio and streaming businesses by mid-2026.

"The team is hard at work both on the separation transaction and on following the board's direction to evaluate strategic alternatives," Chief Executive David Zaslav said in a call with analysts. "It's fair to say that we have an active process underway."

Warner Bros. Discovery shares have soared on news of a possible acquisition, up about 80% since early September and hitting a three-year high.

Interested pirates have reportedly included Paramount Skydance Inc., which has made multiple, increasingly higher-priced offers led by David Ellison and backed by his father, Oracle Corp. (ORCL) co-founder Larry Ellison, who is one of the wealthiest people in the world. Those offers have, so far, been rebuffed.

Some media watchers have said they believe Paramount's interest would eventually trigger competing bids from other companies, including Netflix Inc. (NFLX), Amazon.com Inc. (AMZN), Comcast Corp. (CMCSA) or Apple Inc. (AAPL).

-Lukas I. Alpert

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11-06-25 0923ET