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.
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.
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.
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.
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.
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.
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.
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.”