Netflix Penalties Surge in Q1 Losses.. Hollywood Giant Heads to Paramount

Warner Bros. Discovery, Inc. (WBD) reported first-quarter 2026 revenue of $8.9 billion, a 1% decline year-over-year, and a net loss of $2.9 billion. The loss reflects a $2.8 billion termination fee tied to the cancelled Netflix merger, along with acquisition-related amortization and restructuring charges.

Adjusted EBITDA edged up to $2.2 billion, but operating cash flow fell to negative $280 million and free cash flow to negative $476 million, signaling weaker cash generation. At quarter-end, total debt was $33.4 billion, with net debt of $30.1 billion.

Streaming and studio divisions posted growth, while global cable network revenues declined. In personnel disclosures, WBD announced a tax-driven equity compensation transaction for Chief People & Culture Officer Amy Gouldwood and revealed that CFO Gunnar Wiedenfels has signed a new employment agreement featuring a $2.5 million base salary, enhanced performance bonuses and equity awards.

On April 23, shareholders overwhelmingly approved a merger to sell WBD to Paramount Skydance for approximately $110 billion. If the deal closes, shareholders will receive $31 in cash per share. Paramount Skydance has indicated it will integrate Paramount+ and HBO Max into a unified streaming platform once regulatory approvals are secured.

Formed by the 2022 merger of WarnerMedia and Discovery, Warner Bros. Discovery is a global media and entertainment leader owning HBO, CNN, Warner Bros. Studios, Max and other flagship channels and services. Amid intensifying streaming competition and a softening advertising market, U.S. media companies continue to seek scale and expanded content portfolios through major deals and restructuring, and this transaction represents the latest phase of that industry realignment.