WBD Sees Big Q1 Loss On One Time M&A Charges Including Termination Fee
Deadline • • general
Key Points:
- Warner Bros. Discovery reported a $2.9 billion first quarter loss, largely due to a $2.8 billion termination fee Paramount paid Netflix as part of their merger agreement swap.
- The $2.8 billion fee is refundable under certain conditions, such as if Warner Bros. Discovery terminates the Paramount merger for a superior proposal or breaches interim covenants.
- Streaming revenue, led by HBO Max, grew 7% to $2.9 billion with a 19% increase in direct-to-consumer ad revenue and a 17% rise in profit to $433 million.
- Studio sales and profits surged due to theatrical releases and content licensing, while linear networks saw a 9% revenue decline and a 10% profit dip, impacted by the absence of NBA advertising.
- Warner Bros. Discovery ended the quarter with $33.4 billion in gross debt and negative free cash flow of $208 million, down from positive cash flow the previous year.
