Speculation over Warner Bros Discovery breakup
Two of the biggest entertainment companies in the world delivered their financial results overnight, with blockbuster movie franchises still driving the fortunes of the media giants
Warner Bros Discovery divided its March quarter results into different segments for the first time, fuelling talks that the company is planning to split into two: the linear cable networks, and then Max coupled with the studio.
CNBC’s David Faber notes “they’ve already done all of the reapportioning necessary” for such a split, adding: “It’s become relatively clear to me from the many conversations that I’ve had that we could get some sort of an announcement in the not too distant future that they are planning to try to split the company.”
For the quarter, WBD’s total revenues fell 9%, to $9 billion (A$14b), with EBITDA up 4% to $2.1 billion (A$3.3b).
Fortunes were starkly divided at WBD. Streaming revenues increased 9%, with advertising revenue in this sector up 35%, due to the roll out of ad-supported features in Max in various territories. This is despite losing US subscribers during the past year.
Overall content revenue dropped by 25%, however, dragged down by inaction from the studios division.
Theatrical revenue decreased 27%, which WBD puts down to the seasonality of its box office releases. Dune: Part Two and Godzilla x Kong: The New Empire were both big successes in early 2024, as were home releases of Wonka and Aquaman and the Lost Kingdom. The first three months of 2025 have seen no such blockbusters from the studio.
The company’s gaming revenue dropped by 48%, also due to no substantial releases in the quarter.
Paramount’s financial fortunes were also tied to the box office – and a pending A$12.5 billion merger with Skydance Media, which the company says it is still expecting to close in the first half of this year.
The company reported March quarter revenue of $7.19 billion (A$11.24m), down 6% year-on-year, which Paramount put largely down to having the Super Bowl rights in 2024 for CBS.
Total advertising fell 19%, again due to those Super Bowl ads in 2024, which commanded A$11 million for a 30 second slot.
Streaming revenue jumped 9%, while theatrical revenue dropped 3%, due to being up against 2024’s first quarter films Bob Marley: One Love, Mean Girls and The Beekeeper.
Licensing for home entertainment jumped 6%, thanks to Sonic the Hedgehog 3 and Gladiator II coming to streaming services and home rental.
Looking forward, Paramount’s hopes remain film-based. Donald Trump’s proposed film tariffs have spooked the industry, co-CEO Chris McCarthy telling investors “given the uncertainty, we are prioritising key investments while taking incremental steps to streamline non-content expenses.”
Other, second quarter hopes are all hinged on Tom Cruise. Mission Impossible – The Final Reckoning is expected to boost studio revenue in the current quarter, as hype builds for what is tipped to be Cruise’s final appearance in the long-running franchise.
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Nathan Jolly is the Features Editor at Mumbrella. He joined the team in July, 2023.
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