Warner Bros. Discovery: Streaming Gains and the Paramount Skydance Sale

Quarter at a Glance

Warner Bros. Discovery (DISCK) reported a strong Q1 2026, with management emphasizing the success of HBO Max’s European rollout and a slate of hit content. “Thanks to these successful launches, we've now meaningfully exceeded our guidance of over 140 million total subscribers by the end of Q1. We have strong and accelerating momentum and expect to finish the year with more than 150 million subscribers globally.” — David Zaslav, President and Chief Executive Officer · 2026-05-06 The company also highlighted its return to profitability in streaming, with JB Perrette noting “We were losing $2 billion. We're now -- we made $1.4 billion last year. You saw the results today, growing increasingly double digit on the bottom line.” — Jean-Briac Perrette, CEO and President, Global Streaming and Games · 2026-05-06

HBO Max: The Global Engine

The core of this quarter’s optimism is HBO Max’s global trajectory. After launching in the U.K., Germany, Italy, and Ireland, management sees launch readiness paying off. The service has added nearly 50 million subscribers since 2022, and JB Perrette outlines a multi-lever growth story: “We're seeing the benefits of the operating leverage that we have start to really kick in as the growth on profits is really starting to accelerate as we look throughout the year.” This is a clear acceleration in Streaming growth, supported by an expanding slate of originals, from the Game of Thrones universe to Harry Potter. The focus on quality over quantity — “better is better, not necessarily more is better” — has resonated with audiences and driven engagement to record levels.

Sports and Linear Networks: Disciplined Experiments

On sports, WBD takes a cautious but curious approach. As JB explains, “We know the power of sports but we are more wanting to prove out the ability to do sports profitably.” The company experiments with different models—simulcasts in the U.S., a premium sports product in the U.K., and bundling in Latin America—while managing the shift in linear networks. Gunnar Wiedenfels adds, “We have long stopped viewing our linear networks as linear networks.” — Gunnar Wiedenfels, Chief Financial Officer · 2026-05-06 This is particularly relevant as the broader market debates the role of sports in streaming, with many peers focused on World Cup market dynamics. WBD instead leans on its proven franchises like the Olympics and March Madness, leveraging them to stabilize linear while streaming grows.

The Paramount Skydance Transaction: What’s Next?

The biggest headline, however, is the pending sale to Paramount Skydance at $31 per share, which shareholders approved two weeks ago. David Zaslav frames it as validation of the company’s strategy:

Our shareholders clearly agreed that this offer represents outstanding value, as 2 weeks ago, they voted to approve the sale to Paramount Skydance.

Looking back at prior quarters, the strategic pivot toward internal content utilization has been deliberate. As Gunnar noted in the August 2025 call, “We have very significantly shifted the mix between external and internal content sales over the past 3 years.” — Gunnar Wiedenfels · 2025-08-07 That shift is now paying off in the P&L, even as it previously pressured near-term results. David’s earlier insistence on cutting underperforming content and investing big in franchises—“We canceled a lot of stuff that was down 50% or 60% that we did not think was going to be successful” — David Zaslav, President and Chief Executive Officer · 2026-02-26—has set the stage for today’s creative renaissance.

With streaming now profitable, linear stabilized, and a clear capstone transaction, DISCK is executing its final act as a standalone company while setting up the combined entity for future growth. The question is no longer whether WBD can fix its business, but how the antitrust review will treat the deal and whether the $31 price will ultimately capture the value being created.