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Warner Bros. Discovery has a great story to tell about its streaming business –if only its other operations didn’t get in the way.
The parent of HBO, TNT and the Warner Bros. movie studio said net income in the second
quarter fell significantly as growth at its new-tech streaming operations was more than offset by the continued erosion of its cable-TV networks and a weaker studio lineup than in the year-earlier period. TV ad sales fell 22% due to Warner’s loss of NBA games after the 2025 season, and TV distribution revenue fell due in part to a 10% decrease in the number of subscribers to its networks.
Total revenue fell 11% to $8.7 billion, compared with $9.8 billion in the year-earlier period. Net income attributable to the company fell to $149 million from $1.58 billion, partially the result of $1.1 billion of pre-tax acquisition-related amortization of intangibles, content fair value step-up, and restructuring expenses.
Warner is in a difficult spot. It needs to continue to manage its operations even though it has agreed to be purchased by Paramount Skydance. While the proposed deal has won approval in multiple countries, it has been held up in federal court by a coalition of 12 attorneys general who are making the case that the combination of the two media companies would create an entity that would be in violation of antitrust law in areas such as movie production and the operation of cable television properties. The case will not come to trial until next year.
Even so, Warner had some bright spots to show off. Streaming revenue rose above $3 billion for the first time, thanks to an increase of 10% that was aided by expansion of HBO Max in various markets around the globe. In a move that counters conditions at its TV networks, Warner said advertising and distribution revenue increased noticeably at its streaming venues, with distribution fees up 11% and ad revenue up 8%.
Revenue at the company’s studios was off 39% to $2.3 billion thanks to comparisons with the year-earlier period, which benefitted from the release of films such as “A Minecraft Movie,” “Sinners,” and “Final Destination Bloodlines.”
