Warner Bros. Discovery Posts $2.9B Net Loss Amid Paramount Deal Costs

CNBC reported Wednesday that Warner Bros. Discovery recorded a net loss of $2.9 billion in the first quarter of 2026. The figure dwarfs the $453 million loss posted in the same period a year earlier.

A Deal-Driven Deficit

Two major charges inflated the loss. The company absorbed $1.3 billion in pre-tax costs related to acquisition-related amortization, content fair-value adjustments, and restructuring. It also carried a $2.8 billion Netflix termination fee on its books. That fee originated when Netflix withdrew from a proposed deal to acquire WBD assets after Paramount Skydance submitted a superior offer. Paramount agreed to absorb the fee as part of its all-in acquisition of WBD. However, the liability stays on WBD’s balance sheet until the merger closes. If WBD were to abandon the Paramount deal in favor of a richer offer, the obligation would revert to WBD directly.

Background on the Paramount Acquisition

WBD shareholders approved the Paramount transaction in April, and the deal is now under regulatory review. Paramount said in its own Monday earnings release that it has made meaningful progress toward a close, projecting completion sometime in the third quarter of this year.

Also Read: Paramount Earnings Preview: Merger Timeline in Focus

Operating Results Tell a Mixed Story

Beneath the headline loss, WBD’s underlying business showed uneven performance. Total revenue fell 1% year over year to $8.89 billion. Adjusted EBITDA rose 5% to $2.2 billion, and the company carried $33.4 billion in gross debt at quarter’s end.

Streaming was the standout segment. Revenue for that unit climbed 9% to roughly $2.89 billion, lifted by HBO Max’s international expansion and a 20% jump in advertising revenue as more users opted for the ad-supported tier. WBD said it surpassed its target of 140 million global streaming subscribers and is on pace to exceed 150 million by year-end.

Linear television remained a drag. The pay-TV portfolio, which includes CNN, TBS, and the Discovery Channel, saw revenue drop 8% to $4.38 billion. Linear advertising fell 11%, with the company attributing much of that decline to the absence of NBA media rights. The film studio offered a counterweight, with revenue rising 35% to $3.13 billion year over year.

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