Warner Bros. CEO Confident Paramount Deal Will Close -- Update

By Joe Flint and Connor Hart

Warner Bros. Discovery narrowed its profit in the second quarter, hurt by a large charge, as revenue fell.

The results come as Paramount's $81 billion deal to buy Warner faces legal challenges by 12 states and the Writers Guild, which seek to block the deal on antitrust grounds. A trial date has been set for March 2027.

"We have every expectation the transaction will close," Warner Chief Executive David Zaslav said on a call with analysts Thursday.

Under the terms of the deal, if it hasn't closed by June 4, 2027 Warner can receive a breakup fee of $7 billion.

On Thursday, Paramount received approval from the UK Competition and Markets Authority. Shares ticked up less than 1% in pre-market trading.

The company on Thursday posted a profit of $149 million, or 6 cents a share, compared with $1.58 billion, or 63 cents a share, a year earlier. Analysts polled by FactSet had expected a quarterly loss of 14 cents a share.

Warner said the recent quarter included a $1.1 billion in pre-tax acquisition-related amortization of intangibles, content fair value step-up, and restructuring expenses.

Total revenues fell 11% to $8.72 billion, missing Wall Street estimates for $9.25 billion.

Distribution revenue ticked up 1.3% to $4.95 billion, fueled by streaming revenues of $3.1 billion, an increase of 10%. HBO Max saw subscriber and ad advertiser growth as the service continued to expand its global reach.

However, the performance was more than offset by advertising revenue, which fell 22% to $1.72 billion, and content revenue, which tumbled 26% to $1.83 billion.

The advertising declines were largely the result of Warner's domestic cable networks including TNT, which no longer has rights to the National Basketball Association. Ad revenue in the networks unit was down 27% from a year ago.

The Warner movie studio also had disappointing results due in large part to underperforming titles including "SuperGirl" and "The Bride." Revenue in the Studios unit fell 39% to $2.3 billion.

Write to Joe Flint at Joe.Flint@wsj.com and Connor Hart at Connor.Hart@wsj.com

(END) Dow Jones Newswires

August 06, 2026 09:09 ET (13:09 GMT)