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Warner Bros Discovery Eyes Potential Breakup Amid Revenue Miss and Cable Decline

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Warner Bros Discovery (WBD) is reportedly moving toward a potential company breakup, according to CNBC, as it looks to shed its struggling cable TV division and concentrate on faster-growing streaming and studio segments. The news sent WBD shares climbing over 4%, partially offsetting a sharp 6% drop earlier in the day following disappointing Q1 earnings.

The strategic shift comes as the broader media industry undergoes a profound transformation. Cord-cutting continues to erode the profitability of traditional cable networks, pushing media giants like WBD to reevaluate their core assets. WBD, which was formed through the 2022 merger of Warner Media and Discovery, had already taken initial steps in December by operationally separating its cable TV division from its studio and streaming units.

KEY FINANCIAL HIGHLIGHTS:

  • Revenue: Fell 10% YoY to $8.98 billion, missing analyst expectations of $9.60 billion.

  • Earnings: Posted a wider-than-expected loss of $0.18 per share versus the forecasted $0.13 loss.

  • Studio revenue: Dropped 18% to $2.31 billion, missing the $2.73 billion consensus.

  • Cable networks revenue: Declined 7%.

  • Streaming performance: A bright spot, with Max adding 5.3 million subscribers, beating estimates and bringing its total base to 122.3 million.

CEO David Zaslav highlighted Max’s continued appeal in the competitive streaming space, driven by strong programming like The White Lotus and The Pitt. Still, the studio division underperformed due to weak box office results — most notably the underwhelming performance of Mickey 17, which failed to replicate the success of Dune: Part Two.

On a more optimistic note, Q2 appears to be off to a better start. WBD’s latest theatrical releases — Ryan Coogler’s Sinners and A Minecraft Movie — have garnered major success, with the latter earning nearly $900 million globally and becoming 2025’s biggest box office hit to date.

A potential split would align WBD with peers like Comcast, which is also spinning off traditional cable properties in favor of a more streamlined digital content model. However, analysts caution that divesting cable assets could be challenging due to WBD’s heavy debt burden of $38 billion and the declining appeal of linear TV.

“WBD would be leaner and have stronger growth potential without cable assets,” noted eMarketer’s Ross Benes. “But finding a buyer could be difficult.”

While Warner Bros Discovery has yet to comment on the breakup report, the path toward separation could reshape its future trajectory as it competes for relevance and revenue in an increasingly digital-first entertainment industry.

‘Wicked’ and ‘Gladiator II’ Dominate Domestic Box Office with $169.5 Million

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The domestic box office witnessed a blockbuster weekend as Wicked and Gladiator II combined to rake in $169.5 million in ticket sales across the U.S. and Canada.

Wicked: A Magical Debut

Universal Pictures’ Wicked, the first of a two-part adaptation of the Broadway musical, captivated audiences with its tale of the misunderstood, green-skinned student who becomes the Wicked Witch of the West. The film, starring Ariana Grande and Cynthia Erivo, achieved a record-breaking debut for a movie based on a Broadway musical.

  • Domestic Earnings: $114 million
  • International Earnings: $50.2 million
  • Global Total: $164.2 million

The movie outperformed previous Broadway adaptations, including Les Misérables, making it the biggest opening weekend for the genre.

Gladiator II: A Strong Second Act

Paramount Pictures’ Gladiator II, the long-anticipated sequel to the 2000 Oscar-winning epic, earned $55.5 million domestically. The film stars Paul Mescal, Pedro Pascal, and Denzel Washington in a narrative set 16 years after the original story.

  • Domestic Earnings: $55.5 million
  • Global Weekend Total: $106 million
  • Cumulative Global Earnings: $221 million (including its earlier release in international markets)

This sword-and-sandal epic continues to draw global audiences, fueled by a stellar cast and the legacy of its predecessor.

Box Office Highlights

The weekend showcased the power of established franchises and adaptations in attracting diverse audiences.

  • Wicked appealed to musical theater enthusiasts and new fans alike, delivering a dazzling cinematic experience.
  • Gladiator II capitalized on its historical drama roots and star power, maintaining momentum in its second week.

Both films underscore the enduring appeal of adaptations and sequels, proving their ability to dominate in a competitive box office landscape.