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:
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Revenue: Fell 10% YoY to $8.98 billion, missing analyst expectations of $9.60 billion.
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Earnings: Posted a wider-than-expected loss of $0.18 per share versus the forecasted $0.13 loss.
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Studio revenue: Dropped 18% to $2.31 billion, missing the $2.73 billion consensus.
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Cable networks revenue: Declined 7%.
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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.