Warner Bros. Discovery has been telling investors it wants to split the company in two — and just produced some evidence that such a deal is necessary.
The owner of CNN, HBO and the Warner Bros. studio said it swung to a loss in the third quarter, as a box-office boost spurred by films like the latest “Superman” were offset by declines in its traditional TV business, which suffered from comparisons to the year-earlier quarter when the company enjoyed rights to broadcast the 2024 Paris Olympics in Europe. The company has been pushing to separate its studios and streaming operations from its TV networks, and has said it will consider a sale or other transaction.
While our separation into Warner Bros. (Streaming & Studios) and Discovery Global (Global Networks) remains on track to be completed by mid-2026, our Board of Directors announced on October 21st its decision to initiate a review of strategic alternatives. The Board is evaluating a broad range of strategic options, including proceeding with the planned separation, a potential transaction for the entire company, or separate transactions for the Warner Bros. and/or Discovery Global businesses. As part of the review, we will also consider an alternative separation structure that would enable a merger transaction involving Warner Bros., while Discovery Global would be spun off to our shareholders.” the company said in a letter to shareholders. “There is no deadline or definitive timetable regarding this strategic review process. We do not intend to make any further announcements unless and until the Board approves a specific transaction or otherwise determines further disclosure is appropriate or necessary. As such, we will not be answering any questions on this topic during our earnings call.”
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Revenue during the period came to $9.0 billion, a 6% decrease from the year-earlier quarter. Without including the performance of the Europe Olympics, revenue would have been flat, the company said.
More to come….
