Warner Bros. Revenue Falls 6% as $31 Bidding War Intensifies

Khac Phu Nguyen

Fri, February 27, 2026 at 3:27 AM GMT+9 2 min read

In this article:

PSKY

+10.19%

WBD

-0.05%

This article first appeared on GuruFocus.

Warner Bros. Discovery (NASDAQ:WBD) reported fourth-quarter results that reflect a business still navigating structural pressure, even as a competitive takeover process could reshape its outlook. Revenue declined 6% to $9.46 billion, while adjusted Ebitda came in at $2.22 billion, with both figures landing ahead of Wall Street expectations. The television networks segment, which includes CNN, TNT and HGTV, remained the largest contributor but saw revenue fall 12% to $4.2 billion amid softer advertising and distribution trends, and adjusted Ebitda dropped 27% to $1.41 billion. The studios division also faced headwinds, posting a 13% revenue decline to $3.18 billion versus expectations of $3.37 billion, with earnings down 23% as film, television and video game revenue all moved lower.

Warning! GuruFocus has detected 4 Warning Signs with PSKY.

Is PSKY fairly valued? Test your thesis with our free DCF calculator.

These operating results arrive as the board evaluates competing bids that could materially alter shareholder value. Paramount Skydance (NASDAQ:PSKY) has raised its offer to $31 a share, attempting to surpass the existing agreement under which Netflix (NASDAQ:NFLX) would acquire the studios and HBO Max business for $27.75 a share. If the board determines Paramount’s proposal is superior, Netflix would have four days to respond, either improving its bid or stepping away. Chief Executive Officer David Zaslav said the company has engaged with four bidders, generating eight price increases and a 63% increase in value compared with the first offer received in September, a process that could continue to drive incremental upside depending on how negotiations unfold.

Strategically, the backdrop remains complex. Warner Bros. lost US media rights to National Basketball Association games this season after the league signed a new agreement with Walt Disney, Comcast and Amazon, a shift that weighed on television viewership. Under the Netflix deal, the company plans to spin off its cable networks into a separate entity during the third quarter. Streaming provided relative momentum, with revenue rising 5% to $2.79 billion and 3.5 million subscribers added quarter over quarter, lifting the global base to 131.6 million. Management is targeting 150 million subscribers by the end of the year following launches in Germany and Italy and planned expansion into Ireland and the UK next month. Even so, more than $32 billion in debt remains on the balance sheet, and although shares have rallied 130% since Paramount’s interest became public in September, the eventual outcome of the bidding contest could be a defining catalyst from here.

Terms and Privacy Policy

Privacy Dashboard

More Info