WBD
CommsWarner Bros. Discovery
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XBRL · SEC EDGAR2007–2025(19yr)| Metric | FY 2007 | FY 2008 | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $76.0M | $3.4B | $3.5B | $3.8B | $4.2B | $4.5B | $5.5B | $6.3B | $6.4B | $6.5B | $6.9B | $10.6B | $11.1B | $10.7B | $12.2B | $33.8B | $41.3B | $39.3B | $37.3B | -5.1% |
| Gross Profit | $16.0M | $2.4B | $2.5B | $2.7B | $3.0B | $3.3B | $3.8B | $4.1B | $4.1B | $4.1B | $4.2B | $6.6B | $7.3B | $6.8B | $7.6B | $13.4B | $16.8B | $16.4B | $16.4B | +0.4% |
| Gross Margin | 21.1% | 70.3% | 69.7% | 71.6% | 70.9% | 72.9% | 69.5% | 66.1% | 63.4% | 62.6% | 61.4% | 62.7% | 65.7% | 63.8% | 62.1% | 39.6% | 40.6% | 41.6% | 44.0% | +2.4pp |
| Operating Income | -$8.0M | $1.1B | $1.2B | $1.4B | $1.8B | $1.9B | $2.0B | $2.1B | $2.0B | $2.1B | $713.0M | $1.9B | $3.0B | $2.5B | $2.0B | -$7.4B | -$1.5B | -$10.0B | $738.0M | +107.4% |
| Operating Margin | -10.5% | 30.7% | 35.1% | 36.0% | 42.5% | 41.3% | 36.1% | 32.9% | 31.0% | 31.7% | 10.4% | 18.3% | 27.0% | 23.6% | 16.5% | -21.8% | -3.7% | -25.5% | 2.0% | +27.5pp |
| Net Income | -$68.0M | $317.0M | $560.0M | $653.0M | $1.1B | $943.0M | $1.1B | $1.1B | $1.0B | $1.2B | -$337.0M | $594.0M | $2.1B | $1.2B | $1.0B | -$7.4B | -$3.1B | -$11.3B | $727.0M | +106.4% |
| Net Margin | -89.5% | 9.2% | 15.9% | 17.3% | 26.7% | 21.0% | 19.4% | 18.2% | 16.2% | 18.4% | -4.9% | 5.6% | 18.6% | 11.4% | 8.3% | -21.8% | -7.6% | -28.8% | 1.9% | +30.7pp |
| Free Cash Flow | $11.0M | $467.0M | $551.0M | $619.0M | $1.0B | $1.0B | — | — | — | $1.3B | $1.5B | $2.4B | $3.1B | $2.3B | $2.4B | $3.3B | $6.2B | $4.4B | $3.1B | -30.2% |
| FCF Margin | 14.5% | 13.6% | 15.7% | 16.4% | 24.6% | 22.8% | — | — | — | 19.9% | 21.7% | 23.0% | 27.9% | 21.9% | 19.9% | 9.8% | 14.9% | 11.3% | 8.3% | -3.0pp |
| EPS (Diluted) | $-0.24 | $0.98 | $1.30 | $1.52 | $2.80 | $2.48 | $2.97 | — | — | — | — | — | — | $1.81 | $1.54 | $-3.82 | $-1.28 | $-4.62 | $0.29 | +106.3% |
1. THE BIG PICTURE
Warner Bros. Discovery is a company in a state of controlled demolition, attempting to harvest what remains of its traditional cable networks to fund a transition to streaming and a planned corporate split. While it owns premier intellectual property like Game of Thrones and DC, the $32.6 billion debt load and the collapse of linear television revenue—down 12% in the latest quarter—force a race against time before its legacy assets lose their ability to service its obligations (8-K, Risks).
2. WHERE THE RISKS HIT HARDEST
Warner Bros. Discovery’s "best-in-class" content library is threatened by its $32.6 billion debt load because restrictive covenants on the $17 billion Bridge Loan Facility limit Warner Bros. Discovery’s ability to invest in the studio production and streaming growth it identifies as strategic priorities (10-K Item 1, Risks). Furthermore, the "global distribution" strength is being undermined by the $9.1 billion impairment of its Global Linear Networks; as viewers migrate to digital, the value of Warner Bros. Discovery's traditional reach is physically evaporating from the balance sheet (Risks, Competitive Position).
3. WHAT THE NUMBERS SAY TOGETHER
The financial data reveals a business where the growth engine is too small to offset the legacy anchor. While streaming revenue grew 5% to $2.79 billion, this was entirely erased by double-digit declines in both Studios (-13%) and Linear Networks (-12%) (8-K). This divergence explains why Warner Bros. Discovery ranks last among its peers in revenue growth at -5.1% (XBRL). The 6.2% FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin, while positive, was unfavorably impacted by $600 million in transaction costs, suggesting that the upcoming corporate split into "Warner Bros." and "Discovery Global" will continue to consume the cash needed for debt service (8-K, XBRL). Short interest stands at 2.7% of the float, reflecting a market that is cautious but not yet betting on a total collapse (Supplemental Signals).
4. IS IT WORTH IT AT THIS PRICE?
Warner Bros. Discovery is currently unvaluable on a forward earnings basis, as its Fwd P/EFwd P/EForward P/E — same as P/E but uses next year's estimated earnings instead of past earnings; reflects where investors think the company is going is negative, contrasting sharply with a peer median of 21.7x (Peer Benchmarking). At a trailing P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations of 95.9x, the stock carries a massive premium that the underlying fundamentals do not support; Warner Bros. Discovery’s 1.8% operating margin is the lowest in its peer group, trailing even Live Nation (7.7%) and Disney (19.1%) (XBRL). For the current price to be justified, the planned mid-2026 separation must successfully isolate the $29.4 billion in net debt from the growth assets without triggering the $3.0 billion termination fee associated with the PSKY merger (Risks, Recent Results).
5. WHAT WOULD CHANGE THIS VIEW?
- Constructive if streaming EBITDAEBITDAEarnings Before Interest, Taxes, Depreciation & Amortization — a rough proxy for operating cash profit, stripping out accounting adjustments growth accelerates significantly enough to cover the interest volatility on the $32.6 billion debt stack.
- Cautious if the PSKY merger fails to close by the 2027 deadline, triggering the $3.0 billion penalty and $1.5 billion in lost reimbursements.
- Cautious if further impairments are recorded in the Global Linear Networks unit, signaling that the $9.1 billion write-down was insufficient to cover the decline in advertising.
6. BOTTOM LINE
Structural Advantage: Ownership of high-value, multi-generational franchises (Harry Potter, DC, Game of Thrones) with global distribution across theatrical and digital platforms. Bottom Line: Warner Bros. Discovery is a distressed-asset play masquerading as a media giant, and until it resolves its debt and completes its corporate split, it remains a high-risk gamble on a declining industry.
1. Top 5 Material Risks
- PSKY Merger Uncertainty: The merger is subject to multiple conditions, including regulatory approvals and the requirement that Warner Bros. Discovery does not separate its Streaming & Studios business from its Global Linear Networks business. Failure to complete the merger by March 4, 2027 (or June 4, 2027, if extended) could trigger a $3.0 billion termination fee and require the reimbursement of up to $1.5 billion in payments.
- Linear Network Impairment: Warner Bros. Discovery recorded a $9.1 billion pre-tax, non-cash impairment of goodwill in 2024 for its Global Linear Networks reporting unit. Continued declines in linear television viewership and advertising revenue could necessitate further write-downs of goodwill and other intangible assets.
- High Leverage and Debt Covenants: As of December 31, 2025, Warner Bros. Discovery held $32.6 billion in consolidated debt. The $17 billion Bridge Loan Facility contains restrictive covenants that limit asset sales, debt incurrence, and dividend payments, while requiring a substantial portion of cash flow to be dedicated to debt service.
- Advertising Revenue Volatility: A significant portion of revenue is derived from advertising, which is sensitive to economic conditions and audience fragmentation. The shift of advertising spend toward streaming and digital platforms, combined with the prevalence of ad-supported tiers in competing services, limits Warner Bros. Discovery's ability to maintain historical advertising rates.
- Content Licensing and Distribution: Warner Bros. Discovery depends on third-party distributors for its content. Failure to renew these agreements on favorable terms—or the loss of carriage—directly threatens distribution revenue and reduces the audience reach necessary to sustain advertising income.
2. Company-Specific Risks
- Sports Programming Costs: Warner Bros. Discovery faces intense competition for sports broadcasting rights, leading to upward pressure on programming costs. Warner Bros. Discovery recently settled a legal dispute with the NBA regarding its license to distribute games, and failure to renew such recurring sports events could limit its ability to negotiate higher distribution rates.
- Streaming Subscriber Retention: The success of HBO Max and discovery+ depends on attracting and retaining subscribers in a crowded market. Warner Bros. Discovery’s reliance on bundling partnerships with wireless and broadband providers creates a risk that subscribers may be lost if those third-party arrangements are discontinued or if consumers select alternative plans.
- Labor Disruptions: Warner Bros. Discovery relies on collective bargaining agreements with writers, actors, and other production talent. Past strikes, such as the 2023 WGA and SAG-AFTRA actions, caused production delays and incremental costs that impacted operations even after the disputes were resolved.
- Joint Venture Constraints: Certain business operations are conducted through joint ventures where Warner Bros. Discovery shares management and profits. Disagreements with partners over strategy or management can constrain Warner Bros. Discovery’s ability to make unilateral decisions, potentially impacting financial results.
3. Regulatory/Legal Risks
- Data Privacy and Protection: Warner Bros. Discovery is subject to evolving domestic and international privacy laws, including the European General Data Protection Regulation and the California Consumer Privacy Act. Compliance requires significant resource expenditure, and non-compliance could result in regulatory enforcement actions and significant fines.
- Global Tax Complexity: Warner Bros. Discovery faces increasing scrutiny from tax authorities globally, including the implementation of the OECD’s 15% global minimum corporate income tax rate. Changes in tax policy or the restriction of financial incentives for content production in foreign jurisdictions could materially impact tax liabilities and results of operations.
- Antitrust and Regulatory Review: As a vertically integrated media company, Warner Bros. Discovery faces potential regulatory review from competition authorities regarding its content investment and distribution practices, which could limit its ability to execute strategic transactions or bundle services.
4. Financial Impact Map
PSKY Merger Termination → Cash and Cash Equivalents → $3.0 billion termination fee plus up to $1.5 billion in reimbursements. Global Linear Networks Impairment → Goodwill and Intangible Assets → $9.1 billion pre-tax, non-cash impairment recorded in 2024. Bridge Loan Facility → Long-term Debt → $17 billion term loan maturing in 2027. Advertising Market Decline → Advertising Revenue → Sensitivity to economic conditions and audience fragmentation in linear and digital segments. Sports Rights Licensing → Operating Expenses → Upward pressure on programming costs due to competition for recurring sports events.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 10-K | Feb 2026 | Dec 2025 |
| 8-K | Feb 2026 | — |
| 10-Q | Nov 2025 | Sep 2025 |
| 14A | Apr 2025 | — |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
Warner Bros. Discovery Shareholders to Vote on $31.00 Per Share Cash Merger Offer
- ▸Proposed cash merger at $31.00 per share
- ▸Boards of both companies unanimously approved the transaction
- ▸Merger combines extensive film, television, and streaming assets
- ▸Deal signals shift from streaming expansion to immediate asset value realization
- ▸Transaction subject to shareholder approval and regulatory review
WBD Sets April 23 Shareholder Vote for $31.00 Per Share Paramount Merger
- ▸Special shareholder meeting scheduled for April 23, 2026
- ▸All-cash transaction at $31.00 per share
- ▸147% premium to unaffected stock price of $12.54
- ▸Expected closing in Q3 2026
- ▸$0.25 per share quarterly ticking fee if closing delayed past September 30, 2026
Warner Bros. Discovery sets April 23 shareholder vote on Paramount Skydance merger
- ▸Shareholder vote scheduled for April 23
- ▸Deal terms offer $31 cash per share to Warner shareholders
- ▸$0.25 per share quarterly ticking fee if deal closes after Sept. 30
- ▸Merger involves Paramount Skydance entity
Warner Bros. Discovery acquired by Paramount at $31/share in $83B deal
- ▸Paramount acquires Warner Bros. Discovery for $31 per share
- ▸CEO David Zaslav payout estimated at over $700M including stock and severance
- ▸Paramount targets $6B in cost savings post-merger
- ▸Netflix received $2.8B break fee after being outbid
- ▸Shareholder vote on Paramount takeover scheduled for next month
WBD CEO Zaslav set for $887M payout upon Paramount acquisition closure
- ▸WBD CEO David Zaslav to receive up to $886.8M if Paramount deal closes
- ▸Paramount Skydance to acquire WBD for $31 per share, $110B total valuation
- ▸WBD CFO Gunnar Wiedenfels set for $120M compensation package
- ▸Larry Ellison to personally backstop $40B in equity financing for the deal
- ▸WBD CRO Bruce Campbell and streaming CEO Jean-Briac Perrette to receive $121.5M and $142M
WBD CEO Zaslav potential $667M payout disclosed in $110B Paramount acquisition deal
- ▸Proposed $110B sale of WBD to Paramount Skydance
- ▸CEO David Zaslav potential payout exceeds $667.2M
- ▸Package includes $34.2M cash severance and $633M in stock-based compensation
- ▸Additional $335.4M tax reimbursement possible depending on deal closing date
- ▸Acquisition offer set at $31 per share
Warner Bros. Discovery sold to Paramount for $110 billion in M&A deal
- ▸Warner Bros. Discovery acquired by Paramount for $110 billion
- ▸Final sale price of $31 per share represents significant premium over $19 initial bid
- ▸WBD stock traded as low as $7 per share last year
- ▸Studio won record 11 Oscars at 98th Academy Awards
- ▸Deal described as textbook M&A process by industry analysts
Paramount Skydance to Acquire Warner Bros. Discovery in $111 Billion Mega-Merger
- ▸Acquisition value set at $111 billion
- ▸Creates one of the largest entertainment groups in Hollywood
- ▸Labor unions urging DOJ to block deal without binding job protections
- ▸WBD stock trading at $27.14, 8% below analyst target of $29.40
- ▸Regulatory scrutiny focused on streaming integration and workforce reduction plans
WBD shares offer 14% upside if $31/share Paramount merger closes by Q3
- ▸Paramount agreed to acquire WBD for $31 per share in cash
- ▸WBD stock fell 1.1% to $27.14 following Netflix exit from bidding
- ▸Ticking fee of $0.25 per quarter applies if closing delayed past Sept 30
- ▸Merger expected to close in the third quarter
- ▸WBD shares down from $29 peak prior to Feb 27 bidding news
Netflix to acquire AI moviemaking startup InterPositive for up to $600 million
- ▸Acquisition price up to $600 million in cash
- ▸Deal aims to accelerate AI integration in film production
- ▸InterPositive software enables post-production footage alteration
- ▸Represents one of the largest AI acquisitions by a major studio
- ▸Performance-based earn-outs included for InterPositive owners