Warner Bros. Discovery has told investors it wants to split the company in two, and has just provided some evidence that such a deal is necessary.
The owner of CNN, HBO and Warner Bros. Studios said it slumped to a $148 million loss in the third quarter as box office gains from films such as the latest “Superman” were offset by a decline in its traditional television business, which struggled compared to the same period last year, when the company enjoyed European rights to the 2024 Paris Olympics. The company is pushing to separate its studio and streaming operations from its television networks and has said it would consider a sale or other transaction.
Warner’s planned separation is “on track to be completed by mid-2026,” the company said in a letter to shareholders. Still, Warner is “evaluating a range of strategic options, including pursuing the planned separation, a potential transaction for the entire company, or separate transactions for Warner Bros. and/or the Discovery Global businesses” and will consider “an alternative separation structure that would allow for a merger transaction involving Warner Bros. and in which Discovery Global would be spun off to our stockholders.”
Revenue for the period was $9 billion, a 6% decrease from the same period last year. The company said sales would have been flat without including the European Olympic results.
The company said it added 2.3 million streaming subscribers worldwide, but revenue from these activities was flat compared to the same period last year. Movie revenues rose 74%, largely due to the box office success of films such as “Superman” and “The Conjuring: The Last Rites and Weapons,” as well as some carryover from “F1,” which was released in the second quarter.
Revenue from traditional television operations fell 23% to $3.88 billion. This is due to the loss of an event comparable to the Paris Olympics during the period, and the strong news cycle associated with the 2024 elections. Distribution revenue was down 8%, and advertising revenue was down 21%. million compared to the same period last year.
