Amidst the multibillion-dollar competition to acquire Warner Bros., the company reports a $252 million loss

Warner Bros. in Burbank

(Eric Thayer/Los Angeles Times)

Paramount's Pursuit of Warner Bros. Discovery

As Paramount Skydance continues its ambitious attempt to acquire Warner Bros. Discovery, a stark reality has come to light. Paramount's main television assets—including CBS, Comedy Central, and MTV—are experiencing rapid decline, and its Melrose Avenue film studio reported financial losses. In the fourth quarter of last year, Paramount disclosed an operating deficit of $339 million, which included $500 million in restructuring expenses following Skydance Media's acquisition led by David Ellison.

This financial outcome highlights Paramount's urgent desire to secure Warner Bros. Discovery.

Executives at Paramount have been aggressively working to challenge Netflix's dominance. Earlier this week, Paramount increased its offer for Warner Bros. to $31 per share, adding incentives to push the total value of the proposed deal above $110 billion.

Warner Bros. Discovery's Financial Challenges

On Thursday, Warner Bros. Discovery revealed disappointing fourth-quarter results.

Warner's revenue dropped by 6% to $9.46 billion, resulting in a $252 million loss for the quarter.

Although Warner's streaming platforms, HBO Max and Discovery+, saw some growth, it was insufficient to offset the ongoing decline of its traditional cable networks. Revenue from Warner's linear cable channels fell 12% to $4.2 billion.

The expiration of TNT's NBA contract last year contributed to reduced advertising income. Adjusted earnings for linear channels before interest, taxes, depreciation, and amortization fell 27% to $1.4 billion.

Potential Benefits for Paramount

If Paramount were to acquire Warner's historic Burbank studio, it would gain access to an extensive library of content, including franchises like Harry Potter, Batman, and other DC properties, as well as popular television series such as "The Pitt," "The White Lotus," and "Abbott Elementary."

This acquisition would also strengthen Paramount's production capabilities for both television and film. For instance, Paramount released only eight movies last year.

Warner Bros. Discovery's Recent Successes

During Thursday's analyst call, Warner Bros. Discovery CEO David Zaslav, who has led the company since its separation from AT&T nearly four years ago, highlighted a series of successful releases, including "Sinners," "Weapons," and "A Minecraft Movie."

Warner's films brought in $4.4 billion in box office revenue in 2025.

Zaslav stated, "Our mission for Warner Bros. Discovery has been to make this company the most creative and dynamic place for storytelling worldwide. Looking at 2025, we've achieved that vision."

Studio Revenue and Ongoing Restructuring

Despite strong box office performance, Warner Bros.' movie and TV studios saw revenue decrease by 13% to $3.2 billion. Adjusted earnings before interest, taxes, depreciation, and amortization dropped 23% to $728 million.

The company continues to grapple with the financial impact of previous mergers and subsequent cost-cutting measures.

Warner's $252 million quarterly loss was largely due to a $1.3 billion write-down, as the company continues to absorb restructuring charges from its 2022 merger with Discovery. The decreased value of Warner's programming also played a role.

Leadership and Debt Burden

David Zaslav, president and CEO of Warner Bros. Discovery, attended the premiere of a restored version of the 1959 film "Rio Bravo" at the 2023 TCM Classic Film Festival in Los Angeles.

(Chris Pizzello / Invision / AP)

Warner carries $33.5 billion in debt, a legacy of the 2022 merger that resulted in thousands of layoffs and canceled programming.

Zaslav commented, "We canceled numerous movies and TV series when we arrived—projects we didn't believe would succeed."

Thousands of entertainment industry workers lost their jobs during these reductions, further impacting employment as film production slows in Los Angeles.

Warner's fourth-quarter loss of 10 cents per share was greater than analysts' expectations of a 3-cent loss.

Despite these earnings, Warner's stock remained steady at around $29 per share on Thursday, buoyed by the ongoing bidding war between Netflix and Paramount. Last summer, shares traded at approximately $12.

Zaslav noted, "Our board is conducting a thorough, highly competitive sales process," adding that the company has engaged in discussions with four potential buyers since Ellison initiated the bidding in September.

He explained that the heightened interest has resulted in eight price increases, raising the company's value by 63% compared to the initial offer received in September. This process has delivered substantial gains for Warner Bros. Discovery shareholders.

Future Challenges for the Winning Bidder

Whichever company prevails in acquiring Warner Bros. Discovery—Netflix or Paramount—will face years of restructuring and cost management.

The acquisition would saddle the new owner with over $60 billion in debt.

This article was first published in the Los Angeles Times.