Under a Paramount-WBD merger, two struggling media giants would unite

Netflix has dropped out of the bidding war for Warner Bros. Discovery (WBD), making Paramount Skydance the expected owner of WBD. A Paramount-WBD merger remains subject to regulatory approval, but it’s likely that we will see a Paramount-Skydance-Warner-Bros.-Discovery media giant. Such a conglomerate would unite two legacy media companies that have struggled with profitability for years and have strongly invested in streaming and cable. With Paramount inching closer to WBD ownership, let’s look at what the union implies for streaming and cable. A tale of two struggling businesses Over the past few years, both WBD and Paramount have seen declining revenue and struggled with profitability, as summarized in the table below, leading to WBD becoming eager for a sale and Paramount throwing mountains of money at media mergers. Quarter Paramount Skydance net earnings (in millions) Warner Bros. Discovery net earnings (in millions) Q1 2024 -554 -966 Q2 2024 -5,400 9,986 Q3 2024 1 135 Q4 2024 -224 -494 Full-year 2024 -6,190 -11,311 Q1 2025 152 -453 Q2 2025 57 1,580 Q3 2025 -257 -148 Q4 2025 -573 -252 Full-year 2025 -621 727 Paramount’s financial difficulties, combined with heavy reliance on the declining linear networks, are why analysts like Laura Martin, who covers entertainment and Internet at Needham & Company, say that Paramount “must have” WBD. Paramount is betting that the merger will lead to more consistent profitability by getting its streaming business out of the red and through content creation, theatrical releases, and licensing, as well as by deriving more value from its cable business. HBO Max may become part of Paramount+ Paramount+ isn’t profitable. However, Paramount’s overall streaming business, including Pluto and BET+, has been narrowing losses. In Q4 2025, Paramount’s streaming business posted adjusted operating income before depreciation and amortization (OIBDA) of minus-$158 million (Paramount didn’t share full-year figures). Paramount+ grew revenue 17 percent year over year (YoY) and subscribers from 77.9 million in Q3 to 78.9 million.