Warner Bros. Discovery Reports $2.9 Billion Net Loss Amid Restructuring and Paramount Deal

Last updated: May 7, 2026 9:18 am

4 weeks ago

0 Min Read

Warner Bros. Discovery (WBD) incurred a $2.9 billion net loss in the first quarter, significantly impacted by $1.3 billion in acquisition and restructuring costs, as well as a $2.8 billion termination fee related to the Paramount Skydance deal. While traditional TV revenue declined, the company’s streaming division saw a 9% increase in revenue, exceeding subscriber targets and positioning itself for further growth.

Warner Bros. Discovery Reports .9 Billion Net Loss Amid Restructuring and Paramount Deal

READ MORE FROM CNBC

Warner Bros. Discovery (WBD) has announced a significant net loss of $2.9 billion for the first quarter, a stark increase from the $453 million loss reported in the same period last year. This substantial downturn is primarily attributed to acquisition-related expenses, amortization of intangibles, content fair value step-ups, and restructuring costs totaling $1.3 billion. A significant factor contributing to the loss is the $2.8 billion termination fee owed to Netflix following the collapse of their proposed transaction, a fee that will remain on WBD's books until the completion of the Paramount Skydance deal.

An American flag flies at Warner Bros. Studio in Burbank, California, on Sept. 12, 2025.

Mario Tama | Getty Images

Netflix withdrew from its acquisition bid after Paramount Skydance presented a more favorable offer. The termination fee was part of the agreement where Paramount Skydance would acquire WBD assets. However, the cost is effectively shifted to WBD until the Paramount deal is finalized. This obligation is subject to change if Paramount Skydance were to terminate the agreement for a superior offer.

Shareholders approved the Paramount Skydance acquisition in April, and the deal is currently undergoing regulatory review. Paramount recently indicated substantial progress toward closing the deal, anticipated in the third quarter. Despite the net loss, WBD's first-quarter revenue saw a minor dip of 1% year-over-year, reaching $8.89 billion. Conversely, adjusted EBITDA showed a positive trend, increasing by 5% to $2.2 billion. The company ended the quarter with $33.4 billion in gross debt.

The streaming segment demonstrated robust growth, with total streaming revenue climbing 9% to approximately $2.89 billion. This increase was driven by subscriber revenue, bolstered by the international expansion of HBO Max, and a 20% surge in advertising revenue due to higher uptake of the ad-supported tier. WBD exceeded its guidance, reporting over 140 million global streaming customers by the end of Q1 and is on track to exceed 150 million by year-end.

In contrast, the traditional pay TV networks, including CNN, TBS, and the Discovery Channel, experienced a revenue decline of 8% to $4.38 billion. This downturn was largely due to the absence of NBA media rights, resulting in an 11% decrease in linear advertising revenue. The film studio division, however, posted a significant gain, with revenue rising 35% year-over-year to $3.13 billion.