Warner Bros bipolarity: Improved results in streaming and film, but floundering in television

Hollywood giant Warner Bros. Discovery ended last year with bipolar results that fuel the debate about its future, as it steps closer to being owned by Paramount Skydance, the giant built in just over six months by David Ellison, the son of Oracle founder Larry Ellison.

The historic film studios recorded global revenue of $37.3 billion, representing a 5% decrease compared to the previous year due to the decline in the cable business with a loss of advertising on the TNT, Discovery Channel, Cartoon Network and CNN channels. The group that owns historic movies such as Casablanca and Gone with the Wind posted a profit of $727 million, compared to the $11.3 billion loss reported in 2024. The results exceeded investor expectations with improvements in the studio segment (the traditional film business) and streaming with HBO Max. Shares of the media group are trading relatively unchanged.

Controversial mergers

Warner Bros. Discovery is itself the result of a controversial merger between the historic Hollywood studios and Discovery’s constellation of cable channels. The group has suffered the consequences of fierce competition from streaming services, which has also led to a decline in viewership for its cable television businesses. The company is burdened by a high debt of $33.5 billion, equivalent to 3.3 times its gross operating profit, which costs it more than $2 billion in financial expenses annually.

The group that this season produced and distributed titles such as One Battle After Another, Sinners and Wuthering Heights, all Oscar favorites, has begun separating its business into two subsidiaries: Warner Bros., which will maintain its film catalog, Hollywood studios, and HBO Max, the channel that has produced legendary series like The Sopranos, The Wire, The West Wing and Game of Thrones. This is the subsidiary that Netflix wanted to acquire before it bowed out of the bidding. Warner is also separating its cable business into Discovery Global, which includes CNN and the entire Discovery Channel entertainment network. Paramount’s offer is for both subsidiaries.

In its annual accounts, Warner Bros. Explains that it lost the broadcasting rights for NBA games in the United States after the basketball league signed with Walt Disney, Comcast, and Amazon, which has hampered television viewership.

The group is boasting about the growth of its streaming business, which now has 131.6 million subscribers worldwide, challenging Netflix for the top spot in the sector. The company aims to reach 150 million subscribers by the end of the year, following the recent launch of HBO Max in Germany and Italy and its planned launch in Ireland and the UK next month.

In the meantime, Warner Bros.’ Board has reviewed Paramount’s latest proposal and deemed it superior, opening a period for Netflix to match or surpass it. But executives at the streaming group, owner of series such as Money Heist and Squid Game, have declined to continue the bidding. “This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price,” said Netflix, expressing regret that the deal fell through.

Paramount is owned by David Ellison, the son of Larry Ellison, one of the world’s richest men as well as a friend and donor of Donald Trump. The White House has sponsored the Ellison family’s businesses. Skydance, David Ellison’s small production company, bought Paramount last summer for $8 billion in a classic case of the little fish eating the big fish.

In recent weeks, subliminal messages have intensified, seemingly indicating that the White House would favor the Paramount-Warner deal. In fact, last week Trump publicly asked Netflix to fire one of its board members, Susan Rice, for writing on social media that companies that support Trump’s most extreme policies will have to answer for it when the Democrats regain power.

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