Bros

Warner Bros. Discovery’s impending sale has rattled Hollywood — and the company’s balance sheet as the auction’s high costs increasingly come into focus.

The New York-based media company released its first-quarter earnings Wednesday, which included a $2.9 billion loss. That amount includes $1.3 billion in restructuring expenses, including updated valuations for Warner’s declining linear cable television networks.

Contributing to the net loss was the $2.8 billion termination fee paid to Netflix in late February when the streaming giant bowed out of the bidding for Warner. The auction winner, Paramount Skydance, covered the payment to Netflix but Warner still must carry the obligation on its balance sheet in case the Paramount takeover falls apart. Should that happen, Warner would have to reimburse Paramount.

Warner also spent another $100 million to run the auction and prepare for the upcoming transaction, according to its regulatory filing.

“As we prepare for our next chapter, our focus remains on executing our key strategic priorities: scaling HBO Max globally, returning our Studios to industry leadership, and optimizing our Global Linear Networks,” Warner Bros. Discovery leaders said Wednesday in a letter to shareholders.

Warner generated $8.9 billion in revenue, a 3% decline from the same quarter one year ago, excluding the effect of foreign exchange rate fluctuations.

Its streaming services, including HBO Max, notched milestones in the quarter and 9% revenue growth to $2.9 billion. The company launched HBO Max in Germany, Italy, Britain and Ireland during the quarter.

Advertising revenue for streaming was up 20% compared to the first quarter of 2025.

The streaming unit posted a 17% increase to $438 million in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA).

Warner’s studios, primarily its TV business, had a strong quarter.

Studios revenue rose 31% to $3.1 billion, compared to the prior year quarter.

Television revenue soared 58% (excluding exchange rate fluctuations) due to increased program licensing fees to support the launch of HBO Max in international markets. Those launches also propelled the movie studio, which saw revenue increase 21%.

Video games revenue declined 30% because of lower library revenues.

Adjusted EBITDA for the studios grew $516 million (158%) to $775 million compared to the prior year quarter.

The company’s vast linear television networks saw revenue fall 9% to $4.4 billion compared to the prior year period.

TV distribution revenue tumbled 8% largely due to a 10% decrease in domestic linear pay TV subscribers.

The company also felt the loss of its NBA contract for its TNT channel, which NBC picked up. Advertising revenue fell 12%. “The absence of the NBA negatively impacted the year-over-year growth rate,” Warner said.

As the costs of the merger with Paramount come into clearer focus, the opposition has grown louder.

More than 4,000 artists and entertainment industry workers, including Bryan Cranston, Noah Wyle, Kristen Stewart and Jane Fonda, have signed an open letter warning about the dangers of the merger with Paramount. “This transaction would further consolidate an already concentrated media landscape, reducing competition at a moment when our industries — and the audiences we serve — can least afford it,” according to the letter.

“The result will be fewer opportunities for creators, fewer jobs across the production ecosystem, higher costs, and less choice for audiences in the United States and around the world.”

Adjusted EBITDA for the television networks fell 10% to $1.6 billion, compared to the prior year quarter.

Warner ended the quarter with $3.3 billion in cash on hand and $33.4 billion of gross debt.

Paramount Skydance Chairman David Ellison defended his commitment to release 30 movies a year once his media company swallows Warner Bros. Discovery — a goal that some industry observers view as overly ambitious.

During a Monday call with analysts to discuss Paramount’s first-quarter earnings, the tech scion said the target was achievable because his management team would maintain current levels of production. Paramount has doubled its film release capacity to 15 films this year, matching the number of theatrical releases planned by competing Warner Bros.

“The two companies are actually making 30 films to date,” Ellison said. “We really view our pending acquisition of Warner Bros. Discovery as a powerful accelerant to our strategy.”

The company said it was on track to finalize its Warner takeover by the end of September. The $111-billion deal would transform the smaller Paramount into an industry titan with prestigious programming, including Harry Potter, “Game of Thrones,” “Euphoria,” as well as its current slate of Taylor Sheridan-produced franchises, including “Yellowstone” and “Landman.” The combined company also would own dozens of popular TV networks, including CBS, CNN, Comedy Central, Food Network and HGTV.

But the proposed merger would saddle the combined company with $79 billion in debt, stoking fears that Paramount would need to make steep cost cuts to balance such a large debt load. During the quarter, Paramount lined up banks and other institutional investors to provide bridge financing to help pull off the transaction, the company said.

“We’re pleased with the momentum and will continue to take the necessary steps to bring this deal to completion,” Ellison told analysts.

Late last month, Warner Bros. Discovery stockholders overwhelmingly voted in favor of the deal, which will pay $31 a share to Warner investors. The company now must secure regulatory approvals in the U.S. and abroad, and that process is well underway, Paramount said.

Paramount has asked the Federal Communications Commission for permission to exceed a cap on foreign ownership for U.S. media companies. Ellison’s company is expecting $24 billion from three Middle Eastern royal families, who would become part owners of the combined entity. Those total funds will represent about 49% of equity in that new company, exceeding the current foreign ownership cap of 25%.

More than 4,000 filmmakers, actors and industry workers, including Bryan Cranston, Connie Britton, Kristen Stewart, Jonathan Glazer and Jane Fonda, have signed an open letter asking California Atty. Gen. Rob Bonta and other regulators to block the deal, saying it “would reduce the number of major U.S. film studios to just four.”

Late last week, a small group of consumers sued to block Paramount Skydance’s acquisition of Warner Bros. Discovery and unwind Ellison’s Skydance Media’s takeover of Paramount, alleging that both deals reduce marketplace competition.

For the January-March quarter, Paramount’s earnings beat Wall Street’s expectations. Revenue grew 2% to $7.3 billion compared with the first quarter of 2025.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reached $1.1 billion, helped in part by growth in its streaming services unit. Paramount+ increased its revenue by 17% to nearly $2 billion, compared with the year earlier period when it generated $1.7 billion. The service added 700,000 subscribers, bringing the total to nearly 80 million.

With Warner’s HBO Max streaming platform, the combined service would boast more than 200 million subscribers.

Paramount reported first-quarter net earnings of $168 million, or 15 cents per share, compared with $152 million in 2025, which occurred before Skydance acquired the media company in August.

Executives pointed to “Scream 7,” a late February release that has topped $200 million in global ticket sales, as a success story. Studio revenue grew 11% to $1.28 billion for the quarter.

Television networks revenue declined 6% to $3.7 billion as Paramount’s cable channels continue to contend with the loss of cable cord-cutters, which reduces the company’s collections from pay-TV providers. Nonetheless, Paramount pointed to the strength of Sheridan’s “Landman,” starring Billy Bob Thornton, Ali Larter, Sam Elliott and Demi Moore, and the strength of the CBS television network, which currently has 13 of the broadcast industry’s top 20 prime-time shows, including “60 Minutes,” “Marshals,” and “Tracker.”

The company told analysts it would achieve $30 billion in revenue for the full year and $3.8 billion in adjusted EBITDA. Paramount said it would also make $2.5 billion in cost-cuts by the end of this year and reduce expenses by $3 billion in 2027.

Paramount said it ended the quarter with $1.9 billion in cash and cash equivalents. It also was carrying $15.5 billion in debt. The company had to draw $2.15 billion from its revolving credit facility to pay Netflix a $2.8-billion termination fee that Warner Bros. Discovery had agreed to pay under a previous deal to sell the company to Netflix.

Paramount released its earnings after Monday’s trading day. Its shares closed at $11.13, basically unchanged.

MATT GOSS has revealed how he bravely stood up to muggers who tried to steal his gold Rolex watch.

The former Bros singer sat down with Biz On Sunday’s Emily to speak about the scary incident, which occurred while he was walking his dog Reggie with fiancée Chantal Brown.

Matt, who is back in the studio at London’s famous Abbey Road, said: “We were approached by two people asking for directions.

“We were friendly and tried to help them, but when I pointed the way, they noticed the watch on my wrist.

“One of them immediately became aggressive, trying to distract me by dancing while also grabbing at my wrist.

“I reacted instinctively and, feeling threatened, pushed my head into his before telling him firmly: ‘Don’t you dare’.

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“Chantal and I then went straight into a nearby hotel and called the police.”

Matt, who was born in Lewisham, South East London, where he grew up with twin brother and fellow Bros star Luke Goss, said he would like to see more police on the streets.

He added: “I do feel safe in London overall, but I find it sad that, in such a beautiful city, you can’t always wear something nice without concern.

“I truly wish we still had more bobbies on the beat, with that sense of community, presence and understanding of the local area.”

Matt is back in the UK after spending 25 years in America, where he had a highly successful residency in Las Vegas for 11 years.

His new track, Thank You For The Pain, is out now and will form part of his upcoming album scheduled for September 29.

Matt said: “It’s back to commercial music. I love performing live and I loved the Vegas show and I am super proud of that.

“But there is something about going in the doors at Abbey Road that gives you a sense of occasion and, ‘you better bring your A-game’. It really makes you step up more because of the history.”

He added: “You are going into your church and you are baring all and being extremely truthful. Thank You For The Pain is about turning your pain into something that makes you a better person.

“We have all been hurt by people and that song really helps you recognise what hurts makes you stronger.”

Matt sold 17million records in the Eighties boyband Bros, with the brothers making their big breakthrough in 1988 with Top Ten single When Will I Be Famous?

But after the boyband split up in 1992, the pair went their separate ways until reforming in 2017 to play two dates at London’s O2 Arena.

The lead-up to the comeback was filmed for documentary Bros: After The Screaming Stops, which also showed the ongoing tension between the twins.

Matt revealed in 2024 that they were “completely estranged”.

But he is hopeful that they may manage to sort out their differences and step out on stage together once again.

He said: “I would love nothing more than to jump on stage with my brother again, I’m pretty sure we don’t hate each other but we have stuff to sort out.

“I believe there is respect for each other. I’d love to do Glastonbury with my brother.”

MATT GOSS has given Biz On Sunday readers the first full clip of his new video, Thank You For The Pain. It is Matt’s first animated video and is created by Nobody Asked Studios.

A source said: “Matt is a huge fan of Nobody Asked Studios and the track worked perfectly with the animated style.”

Millie’s book Taylor made

NEWLY single heiress Millie Mackintosh plans to put pen to paper following her recent split from Hugo Taylor.

The ex-Made In Chelsea star is working with publisher Little, Brown Group on a new book.

A source said: “Millie’s been through a lot in the last year and she’s writing it all down.

“Her first book was about her sobriety, but this one will look at motherhood, her ADHD diagnosis and the changes in her personal life, including her split from Hugo.

“Writing is very cathartic for Millie, so it’s also helping her process what’s been going on in her life. She will reveal a lot about the breakdown of her marriage and there will likely be a few surprises.

“Millie really wants to be honest and relatable.”

The book comes after Millie’s first husband, rapper Professor Green, gushed about her recently . . . 

Zara’s Shak for more

ZARA LARSSON and Shakira look summer ready after collaborating on a new song.

The Swedish pop star has remixed her track Eurosummer with the Hips Don’t Lie hitmaker.

It comes as Zara releases remix album Midnight Sun: Girls Trip featuring Pinkpantheress, Tyla and Robyn.

Shakira posted on Instagram: “Happy release day, Zara Larsson. Can’t wait for our video to come out.

“In the meantime, starting my Euro summer from Rio.”

Dean’s back on market

HE is known for being a ladies’ man, but it looks like former EastEnders star Dean Gaffney is single once again.

I can reveal that he has split from Harvard graduate Kate Black after dating for a year.

A source said: “Dean and Kate have agreed to go their separate ways.
“They enjoyed a whirlwind romance, but decided that their relationship was more friendly.

“Kate wasn’t Dean’s usual type, but he learned a lot from her.”

Kate studied international relations at the top US university and artificial intelligence at the University of York.

A mutual pal introduced them and they started dating in April last year, a month after she split from her long-term boyfriend.

Last June, Dean, who played market sweeper Robbie Jackson in the BBC One soap, was spotted on holiday in Ibiza with Kate.

Stones face music for album launch

THE ROLLING STONES have teased the cover for their much-anticipated new album as they prepared for its press launch this week.

A poster appeared on social media yesterday showing Mick Jagger, Keith Richards and Ronnie Wood imagined as one face. The eyecatching design was dreamt up by American painter Nathaniel Mary Quinn.

On Tuesday, the band will hold the press launch of the new record, Foreign Tongues, in New York. Then, on Wednesday, Mick Jagger will appear on The Tonight Show, hosted by Jimmy Fallon.

The US TV star presented a global press conference in 2023 in East London for the band’s last album, Hackney Diamonds.

A countdown clock for the new record, out on July 10, has now appeared outside the group’s merchandise store on London’s Carnaby Street. It also shows the album’s title written in a variety of different languages.

One staff member claimed everyone was sworn to secrecy, adding: “I plead the Fifth Amendment.”

Another said: “They have not told us anything in case it backfires on them.”

And, yet again, the band have also updated their famous tongue logo, originally created by British art student John Pasche in 1970.

Last month, The Stones released a vinyl-only single, Rough & Twisted, under the pseudonym The Cockroaches. Meanwhile, I revealed that PAUL McCARTNEY will also feature on a new album track following his cameo on Hackney Diamonds.

Sounds like this is going to be the album of the year.

A group of five consumers have filed a lawsuit against Paramount Skydance seeking to block its acquisition of Warner Bros. Discovery and unwind the earlier merger that joined the storied Melrose Avenue studio with David Ellison’s Skydance Media, alleging that both deals reduce marketplace competition.

The lawsuit, filed Thursday in U.S. District Court in the Northern District of California, alleges the Paramount-Warner deal will lead to increased prices, fewer consumer choices and reduce production of film and TV since a major rival in the entertainment business will be eliminated.

The suit also alleges that the Paramount-Skydance merger, which was finalized last year, led to higher prices for the Paramount+ streaming service.

The plaintiffs — Pamela Faust, Len Marazzo, Lisa McCarthy, Deborah Rubinsohn and Gary Talewsky — are either Paramount+ subscribers, pay for cable bundles that include Paramount-owned TV channels or are moviegoers who watch films in theaters.

The deal activity for Paramount is part of a growing list of recent media mergers, including Walt Disney Co.’s 2019 acquisition of much of 21st Century Fox and Amazon’s purchase of MGM in 2021.

“These acquisitions show an industry moving by successive combinations toward fewer independent rivals, exactly the consolidation backdrop that heightens the competitive threat posed by the next merger, even if the combined firm remains smaller than the largest platforms,” the lawsuit states.

Paramount is aware of the lawsuit and “confident that it is without merit,” a company spokesperson said.

“The combination of Paramount and [Warner Bros. Discovery] will create a stronger competitor that is well positioned to serve as a champion for creative talent and consumer choice,” the spokesperson said in a statement.

The Paramount-Warner deal is currently winding its way through regulatory approvals. While that process is underway, Paramount has asked the Federal Communications Commission for permission to exceed a cap on foreign ownership for U.S. media companies.

Paramount expects to receive $24 billion in funds from three Middle Eastern royal families, who will become part owners of the combined company. Those total funds will represent about 49% of equity in that new company, exceeding the current foreign ownership cap of 25%.

Paramount has said the Ellison family and RedBird Capital Partners “collectively hold the largest equity stake in the combined company and continue to be the sole owners of Class A Common Stock, representing 100% of the voting shares.”

But on Friday, Rep. Sam Liccardo (D- San Jose) urged the FCC to deny Paramount’s petition on the foreign ownership aspect of the deal.

“Congress did not entrust the public airwaves to this agency so that it could auction off America to Riyadh, Abu Dhabi and Doha,” he wrote in a statement. “This will not stand.”

Paramount Skydance’s proposed takeover of Warner Bros. Discovery cleared a major hurdle Thursday as Warner stockholders overwhelmingly embraced the $111-billion deal.

Approval was expected. Paramount Chairman David Ellison’s proposal would pay Warner investors $31 a share — four times the price of the company’s stock a year ago. Warner Bros. officials did not disclose the precise vote count during the nine-minute special shareholder meeting beyond saying the merger “received sufficient votes and has overwhelmingly passed.”

Paramount offered the generous premium to compete with, and ultimately triumph over, Netflix, which withdrew from the auction in late February after Ellison’s father, Oracle billionaire Larry Ellison, agreed to guarantee the financing of his son’s deal.

The merger would create a new Hollywood behemoth by giving Paramount, which owns CBS and the Melrose Avenue film studio, such valuable assets as HBO, HBO Max, CNN, TBS, Food Network and Warner Bros.’ film and television studios in Burbank. Warner controls beloved TV shows, franchises and movies, including “Casablanca,” Harry Potter, D.C. Comics, “Game of Thrones,” “Euphoria,” “The Pitt,” and “Rooster.”

“Shareholder approval marks another important milestone towards completing our acquisition of Warner Bros. Discovery, building on our successful equity and debt syndications and progress across regulatory approvals,” Paramount said Thursday in a statement. “We look forward to closing the transaction in the coming months and realizing the creation of a next-generation media and entertainment company that better serves both the creative community and consumers.”

Paramount now must secure regulatory approvals in the U.S. and abroad. Ellison, who is poised to honor President Trump with a dinner Thursday evening in Washington, hopes to complete the deal by late summer.

Shareholders, however, made known their disdain for Warner Chief Executive David Zaslav’s proposed golden parachute, which could swell to $887 million, depending on when the transaction closes. His cash, stock and options would be valued at more than $550 million. Warner board members also agreed to pay his tax bill, which could approach $330 million, should the merger be completed by year’s end.

Shareholders, in a non-binding vote, voted against Zaslav’s package.

Paramount’s deal has encountered significant opposition in Hollywood and beyond.

More than 4,000 filmmakers, actors and industry workers, including Ben Stiller, Bryan Cranston, Ted Danson, J.J. Abrams and Kristen Stewart have signed an open letter asking California Atty. Gen. Rob Bonta and other regulators to block the deal.

Opponents fear the consolidation would be lead to massive layoffs and diminish the quality of programming that Warner Bros., CNN and HBO are known for. Hollywood has sustained thousands of layoffs over the last six years; the film production economy hasn’t recovered from shutdowns during the 2023 labor strikes.

“This is already an incredibly consolidated industry where writers have seen merger after merger leave fewer and fewer companies in control of what our members can get paid to write,” Michele Mulroney, president of the Writers Guild of America West, said Wednesday during a press briefing organized by Free Press and other progressive groups that oppose the merger.

“A combined Warner Bros. and Paramount would create a media behemoth with tremendous leverage to reduce content, to raise prices, to increase control of production, to suppress member compensation, worsen working conditions and silence the voices of our members,” Mulroney said.

Trump has long agitated for changes at CNN, and few expect his Justice Department to block the transaction. Defense Department Secretary Pete Hegseth echoed the sentiment. “The sooner David Ellison takes over that network the better,” Hegseth told reporters in March.

It’s unclear whether Bonta or other state attorney generals will file a lawsuit to try to stop the deal. Bonta previously told The Times that his office is reviewing the consolidation.

“This deal can get blocked. I personally think it will get blocked — or undone,” Alvaro Bedoya, former Federal Trade Commission member who now serves as a senior adviser to the American Economic Liberties Project, told reporters Wednesday. He pointed to other proposed mergers that unraveled due to fierce opposition, including the proposed combinations of grocery giants Kroger and Albertson’s.

David Ellison has promised to keep HBO entact and the Paramount and Warner Bros. movie studios humming. He promised cinema owners last week that a combined Paramount-Warner Bros. would release 30 movies into theaters each year.

“This transaction uniquely brings together complementary strengths to create a company that can greenlight more projects, back bold ideas, support talent across multiple stages of their careers,” Paramount said in a statement to push back on the opposition. The company would have the power to “bring stories to audiences at a truly global scale — while strengthening competition by ensuring multiple scaled players are investing in creative talent.”

To finance the Warner takeover, Ellison’s billionaire father, Larry Ellison, has agreed to guarantee the $45.7 billion in equity needed. Bank of America, Citibank and Apollo Global have agreed to provide Paramount with more than $54 billion in debt financing.

Paramount has enlisted a former Trump administration official, lawyer Makan Delrahim, who served as Trump’s antitrust chief during the president’s first term.

In a confident move, Delrahim filed to win the Justice Department’s blessing in December — even though Paramount didn’t have an agreement with Warner Bros. Discovery’s board at the time. In February, a key deadline for the Justice Department to raise issues with Paramount’s proposed Warner takeover passed without comment from the Trump regulators.

The company’s stock plunged about 8 percent on the news of Hastings’s departure.

Netflix Chairman Reed Hastings is leaving the streaming service he cofounded 29 years ago as the company regains its footing after it lost its $72bn deal for Warner Bros Discovery to Paramount Skydance.

In a letter to investors released on Thursday, Netflix said Hastings will not stand for re-election at its annual meeting in June and plans to focus on philanthropy and other pursuits.

The company’s stock plunged about 8 percent on the news of Hastings’s departure. The cofounder is credited with helping to revolutionise how movies and television shows are delivered in homes, upending Hollywood’s business model.

“Netflix is growing revenues double-digits, expanding margins in 2026 and gushing free cash flow,” said LightShed Partners media analyst Richard Greenfield. “While the Q1 was uneventful financially, the departure of Reed Hastings has spooked investors.”

Netflix reaffirmed in a 14-page shareholder letter that its mission remains “ambitious and unchanged” – to entertain the world, providing movies and series for many tastes, cultures and languages. The company’s full-year outlook remained unchanged.

The company did not say how it plans to spend the $2.8bn termination fee it received after losing the Warner Bros movie studio and HBO, and lifted its earnings per share to $1.23 in the first quarter compared with 66 cents per share in the same quarter last year.

Revenue rose to $12.25bn, an increase of 16 percent from the year-ago period, modestly exceeding analyst forecasts of $12.18bn.

Netflix, which long told investors that a Warner Bros acquisition was a “nice to have, not need to have” proposition, highlighted areas of future growth.

The company said its investment in expanding its entertainment offerings, with video podcasts and live entertainment – such as the World Baseball Classic in Japan – is driving engagement.

It plans to use technology to improve the user experience and improve monetisation, as advertising revenue remains on track to reach $3bn in 2026 – a twofold increase from a year ago.