Warner Bros Discovery is considering a breakup, according to a report from CNBC. This move comes as media companies are looking to reshape their struggling cable TV businesses and focus more on their growing streaming and studio operations. Following the news, Warner Bros Discovery’s stock rose over 4%, recovering from earlier losses of nearly 6% after a disappointing quarterly report.
The company recently reported a larger-than-expected loss and missed revenue estimates for the first quarter. This was largely due to poor box office performance and ongoing declines in cable subscriptions. Warner Bros Discovery’s revenue fell 10% to $8.98 billion, missing analysts’ expectations of $9.60 billion. The loss of 18 cents per share was also worse than the anticipated 13-cent loss.
In December, the company laid the groundwork for a potential sale or spinoff of its declining cable TV assets. This separation would align it with Comcast, which is also spinning off its struggling NBCUniversal cable networks. Analysts have speculated for some time about a breakup, noting that Warner Bros Discovery owns valuable assets like CNN, HBO, and the Warner Bros studio.
The company is facing challenges as it loses thousands of cable subscribers each year. This pressure pushes them to create hit content and improve profitability in their streaming sector. The recent threat of tariffs on foreign-made films adds to the difficulties for the industry, which often produces high-budget films internationally.
In the first quarter, Warner Bros Discovery struggled to match the success of its previous hits. Their major release, "Mickey 17," barely covered its production costs. As a result, studio revenue dropped by 18% to $2.31 billion, falling short of the $2.73 billion that analysts had predicted. However, there is hope as the company has had a strong start to the second quarter with successful releases like "Sinners" and "A Minecraft Movie," which has grossed around $900 million worldwide, making it the biggest film of 2025 so far.
Despite the challenges, Warner Bros Discovery’s streaming business showed promise, adding 5.3 million subscribers in the last quarter, surpassing the estimated 3.1 million. This brings their total streaming subscribers to 122.3 million, bolstered by popular content like the third season of "The White Lotus" and the new medical drama "The Pitt."
Overall, while Warner Bros Discovery faces significant hurdles, its streaming growth offers a glimmer of hope amid a shifting media landscape.