Warner Bros. Discovery (WBD), the beleaguered media behemoth born from the ill-fated 2022 merger of WarnerMedia and Discovery, is once again teetering on the edge of irrelevance. In its latest quarterly earnings, released on November 6, 2025, the company disclosed a net loss of $148 million for Q3 – a stark reminder that even blockbuster hits like Superman and The Conjuring: Last Rites can't stem the tide of decay in its crumbling linear TV empire.
With revenue dipping 6% to $9.0 billion and advertising income cratering 21%, WBD's board is accelerating plans to carve up the company into two separate entities: a shiny streaming and studios powerhouse (Warner Bros.) and a fading cable relic (Discovery Global). But as suitors circle like sharks, the real question isn't if WBD will be sold – it's who will inherit this Frankenstein's monster of a conglomerate.
A Tale of Two Businesses: Blockbuster Wins and Cable Losses
WBD's Q3 results paint a bifurcated portrait of Hollywood's future versus its past. On the bright side, the Studios segment exploded with a 126% surge in Adjusted EBITDA, propelled by a record-breaking $4 billion in global box office revenue for 2025 alone – the only major studio to cross that milestone this year.
Hits like Superman, Weapons, Sinners, and Final Destination: Bloodlines not only dominated theaters but also supercharged streaming engagement on Max (formerly HBO Max), with Q3 viewership spiking as these titles hit the platform. Film revenue itself jumped 74%, a testament to CEO David Zaslav's pivot toward tentpole franchises amid the post-pandemic recovery.
Streaming, too, showed glimmers of hope. Global subscribers grew by 2.3 million, pushing the total to over 110 million, while the segment flipped to profitability with $345 million in Adjusted EBITDA – a 24% increase year-over-year on a constant currency basis.
Ad-supported tiers drove much of this, with ARPU (average revenue per user) holding steady despite promotional pricing wars with rivals like Netflix and Disney+. Free cash flow hit a robust $701 million, up 11% from last year, enabling $1.2 billion in debt repayments and trimming the net leverage ratio to a healthier 3.3x EBITDA.
Yet, these victories feel pyrrhic against the backdrop of catastrophe in traditional TV. Domestic linear subscriptions plummeted 9%, dragging down the Networks segment and contributing to the overall revenue miss – $9.0 billion fell short of Wall Street's $9.15 billion forecast. Advertising revenue, once the lifeblood of cable giants like CNN and TNT, nosedived 21%, hammered by cord-cutting and the shift to connected TV ads.
Sports rights remain a sore spot: The loss of NBA broadcasting deals (transitioning to new partners in 2025) looms large, though executives touted upcoming gains from other leagues during the earnings call. EPS came in at a loss of $0.06 per share, beating lowered expectations of -$0.09 but underscoring the company's chronic underperformance.
This internal schism isn't new – WBD has been mulling a split since early 2025, with formal separation eyed for mid-2026. The goal? Unlock value by isolating the high-growth Warner Bros. (studios, DC Comics, HBO) from the value-destroying Discovery Global (cable networks, reality TV). But with $40 billion in debt still weighing it down, even that may not be enough to avoid a fire sale.
Stock Surge Amid the Storm: M&A Fever Grips Investors
WBD's woes haven't deterred the market – far from it. Shares rocketed 24% in the month following the sale process announcement, hitting a 52-week high of $23.06 on November 11, 2025, for a staggering 149% one-year gain. Trailing 12-month revenue stands at $38.4 billion as of June 2025, but Série stock's volatility reflects the high-stakes drama: from a low of $7.62 in early 2025 to current levels buoyed by acquisition speculation.
Analysts like those at CFRA maintain a $0.35 EPS estimate for full-year 2025, but whispers of $30+ per share bids have analysts salivating. As one Seeking Alpha contributor put it, Q3's "operational execution reinforces strategic appeal," making WBD a tantalizing target despite the red ink.
The Hostile Takeover Tango: Paramount's Ellison Plays the Trump Card
Enter David Ellison, the 43-year-old scion of Oracle billionaire Larry Ellison and CEO of the freshly minted Paramount Skydance. Since sealing an $8 billion merger with Paramount Global in early 2025 – greenlit by the Trump administration despite antitrust eyebrow-raises – Ellison has been on a tear, courting Tom Cruise for blockbusters and inking a $7.7 billion UFC streaming deal.
Now, he's fixated on WBD, firing off three unsolicited bids since mid-September, the latest a $23.50 per share offer to swallow the entire company. All were rebuffed by Zaslav's board as undervaluing the assets, but Ellison remains "undeterred," sources say, dangling a co-CEO role for Zaslav in a combined entity.
What gives Ellison the edge? A literal "Trump card." President Donald Trump's inner circle views him as the only suitor likely to glide through regulatory scrutiny, thanks to Larry Ellison's status as a mega-donor and "big supporter." Trump has publicly praised the Ellisons for their Paramount takeover, quipping they'll "do the right thing" with CBS.
Rivals like Comcast (led by Trump's longtime Twitter foe Brian Roberts) face an uphill battle; the administration's animus could torpedo any bid. Netflix and Sony have been floated, but insiders dismiss them as non-starters.
Paramount's rhetoric has turned hostile: In a fiery letter to WBD's board, Ellison warned that rejecting a fair offer could force "hostile" tactics, including direct appeals to shareholders.
A Paramount-WBD merger would birth a $100 billion+ colossus, fusing HBO Max and Paramount+ into a streaming juggernaut, Warner Bros. studios with Paramount Pictures, and CNN with CBS News – a prospect that has Democrats like Sen. Elizabeth Warren sounding alarms over media consolidation under pro-Trump ownership. "One giant company could control almost everything you watch on TV," she cautioned, evoking fears of editorial meddling at outlets like CNN.
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The Bigger Picture: A Media Shake-Up in Trump's Shadow
This isn't just corporate chess; it's a referendum on media's future in a polarized America. WBD's split-or-sell dilemma mirrors the industry's broader convulsions: Streaming's $345 million EBITDA win signals profitability, but linear TV's 9% subscriber bleed-off is existential.
If Ellison prevails, expect massive synergies – $1 billion in merger savings already eyed at Paramount – but also brutal layoffs and content purges to streamline the overlap. Zaslav's $40 per share sale target feels aspirational, but with Trump tilting the scales, Ellison might not need to bid that high.
For investors, it's a gambler's paradise: WBD stock's 153% six-month surge screams opportunity, but the Trump factor adds geopolitical roulette. Will regulators bless a deal that hands one family outsized sway over news and entertainment? Or will antitrust hawks force a breakup, spinning off Warner Bros. as a standalone gem?
Either way, WBD's descent feels terminal – and in Hollywood, sinking ships make for the saltiest buyout bait.
As Ellison's advisers crow, "Trump's implicit support is our number one talking point." Zaslav, Zaslav... someone throw this company a lifeline before it drags the entire industry under.
