
Warner Bros. Discovery shares climb as CNN parent weighs splitting company: report
Warner Bros Discovery is moving towards a potential breakup, CNBC reported Thursday, as media companies explore options for their struggling cable TV businesses and sharpen focus on their faster-growing streaming and studios divisions.
The company's shares surged more than 4% on the news, rebounding from earlier losses of nearly 6% triggered by a dour quarterly report.
Warner Bros Discovery missed first-quarter revenue estimates and posted a larger-than-expected loss earlier in the day due to a sluggish box office performance and ongoing declines in cable.
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3 Warner Bros Discovery missed first-quarter revenue estimates and posted a larger-than-expected loss earlier in the day due to a sluggish box office performance and ongoing declines in cable.
REUTERS
It did not immediately respond to a Reuters request for comment on the CNBC report, which cited unnamed sources.
WBD laid the groundwork for a possible sale or spinoff of its declining cable TV assets in December by announcing a separation from its streaming and studio operations.
It reported results under the new structure for the first time on Thursday.
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A split would align WBD with Comcast, which is spinning off the fading NBCUniversal cable TV networks, including MSNBC and CNBC, to position itself for growth in the streaming era.
Analysts have long speculated about a break-up of WBD, whose assets include CNN, HBO and the coveted Warner Bros studio.
Bank of America research analyst Jessica Reif Ehrlich said last year that WBD's cable television assets are a 'very logical partner' for Comcast's new spin-off company.
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Like others in the media business, Warner Bros Discovery is losing thousands of cable TV subscribers each year, putting pressure on the company to consistently produce hit content and boost profitability in its streaming business.
The threat of US tariffs on foreign-made films has also added to the headaches of an industry whose biggest-budget films are often produced across several continents.
3 Analysts have long speculated about a break-up of WBD, whose assets include CNN, HBO and the coveted Warner Bros studio.
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Studio weakness
In the January-March quarter, WBD struggled to replicate the success of last year's 'Dune: Part Two,' which grossed more than $700 million.
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The company's marquee release for the period, Bong Joon Ho's sci-fi dark comedy 'Mickey 17,' earned only slightly more than its reported budget at the box office.
That meant studios revenue fell 18% to $2.31 billion, missing estimates of $2.73 billion, according to Visible Alpha.
The company has, however, made a strong start to the second quarter with Ryan Coogler's horror film 'Sinners' and the blockbuster 'A Minecraft Movie,' which has raked in around $900 million globally, making it the biggest release of 2025 so far.
Its summer lineup also looks strong with 'Superman,' directed by Marvel's long-time hitmaker James Gunn, set to release in July.
3 The blockbuster 'A Minecraft Movie' has raked in around $900 million globally, making it the biggest release of 2025 so far.
AP
Revenue at the TV networks segment, which includes CNN, Discovery Channel and Animal Planet, fell 7% in the quarter.
Overall, revenue fell 10% to $8.98 billion, missing analysts' average estimate of $9.60 billion, according to data compiled by LSEG.
Loss of 18 cents per share was also larger than expectations for a 13-cent loss.
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Still, its streaming business was a bright spot.
WBD added 5.3 million streaming subscribers in the quarter, compared with 3.1 million estimated by analysts, according to Visible Alpha, taking its total to 122.3 million.
The quarter featured some strong content slate including the third season of HBO's 'The White Lotus' and the medical drama series 'The Pitt.'
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Warner Bros. Discovery to split CNN, TNT from HBO Max and studios
Warner Bros. Discovery, the parent company of HBO Max, CNN and TNT, announced Monday it would split into two companies by the middle of next year, the latest move by a major media conglomerate to reckon with a fracturing audience landscape. The split will see one company house Warner's studios and streaming units, which include HBO Max, the DC Comics universe, and film production and distribution. That group will be led by WBD CEO David Zaslav. The other will comprise WBD's TV networks, such as CNN and Discovery, and will be led by Chief Financial Officer Gunnar Wiedenfels. That company will also take on most of WBD's existing debt. 'By operating as two distinct and optimized companies in the future, we are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today's evolving media landscape,' Zaslav said in a statement. The move is likely to trigger a fresh wave of deal-making and consolidation in the legacy TV industry, which has been hammered by cord-cutting from cable customers who are shifting more to streaming and social video platforms like TikTok. WBD's decision echoes Comcast's announcement late last year stating it was spinning off its cable networks, including CNBC, MSNBC, E!, Syfy, Golf Channel, USA and Oxygen. That new company is set to be called Versant. Comcast owns NBCUniversal, the parent company of NBC News. The news confirms earlier reporting that had indicated WBD was heading toward such a split, as Zaslav looked to reset the company's finances. In December, the company announced restructuring that many saw as a precursor to a full break. Zaslav has experienced a turbulent time atop WBD, which was formed in 2022. Within months of the conglomerate's official launch, he was already addressing speculation that it was pursuing a sale. He has also taken flak for shelving nearly finished movie projects and ending Chris Licht's tenure as CNN chairman and CEO after just one year. Wall Street has pummeled WBD's shares, which have fallen by some 60% since Zaslav was named head of the company. Its stock jumped 11% in Monday trading following news of the coming split. In a recent note to clients, Bank of America analysts said WBD was "not working as a publicly traded entity" and that "transformative changes" were likely needed despite what they called the "tremendous value" of WBD's core media properties. Zaslav, in a call with investors Monday morning, said the company would consider where to house WBD's streaming sports efforts, noting they have not been a 'driver' for their current home on HBO Max. WBD recently lost the rights to the NBA to NBCUniversal and Amazon's Prime Video. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data