Warner Bros. Discovery has been on something of a bumpy road for the last couple of years. Some high-profile flops and the failure of some big IPs has hurt them. When the first quarter results dropped, they had some OK numbers in there, but overall it was still a loss.
Revenue came in at $9 billion, with streaming revenues increasing 9%, and ad revenue in that sector up 35%. There were 5.3 million new streaming subscribers to their various services from January-March.
However, theatrical revenue dropped 27% and gaming revenue dropped 48%.
Overall, it stacked up to 6% losses. So why did shares go up off the back of the news?
Well, some comments by analysts and observers may have given a glimpse into the future. Back in December, Warner Bros. Discovery said that it was looking into a corporate restructuring. This would aim to separate the linear networks like CNN, TBS, and TNT from what they regard as “growth drivers” like the studios and Max.
Now CNBC’s David Faber says Warner has already done all of the reapportioning necessary, and he says:
“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.”
Why would they do this? The answer may be Universal. For a while now, rumors have swirled that Universal might be interested in boosting its position with a mega-merger post Disney / Fox. They would likely not be interested in linear networks, but the high-value IP and the solid streaming service would be another matter.
Is this Warner Bros. Discovery getting match-fit for a future merger?
