Warner Bros. Discovery Leaders Look to Future But Avoid Sale Questions
Warner Bros. Discovery leaders David Zaslav and JB Perrette discussed the potential of upcoming projects for Warner Bros. and HBO Max, as well as the future of Discovery Global linear channels, during an earnings conference call on Thursday morning. The call awkwardly sidestepped the biggest question hanging over the studio: the status of the M&A tug-of-war between Netflix and Paramount Skydance.
The WBD board is currently deciding how to respond to the latest offer from Paramount, and many questions from analysts focused on the planned spinoff of Discovery Global. The fate of CNN, TNT, Discovery Channel, HGTV, Food Network, and other channels hangs in the balance, as Netflix has a signed acquisition agreement with WBD, while Paramount Skydance hopes to buy the entire company.
Gunnar Wiedenfels, WBD's chief financial officer and CEO-designate for the Discovery Global spinoff, answered questions as if the spinoff is already proceeding. The valuation of the Discovery Global channels has become a sticking point in the Netflix vs. Paramount Skydance bidding war. The spinoff is set to take on a significant portion of WBD's $33 billion in long-term debt, but Wiedenfels asserted that the spinoff would emerge with a 3.3 debt-to-earnings ratio, which he called "absolutely sustainable and supportable."
Analysts' focus on Discovery Global questions indicated that they are trying to crunch the numbers on the latest offer from Paramount, while everyone watches to see if Netflix ups the ante on its $83 billion agreement to acquire Warner Bros. and HBO. Zaslav, meanwhile, made the case for how the company has been transformed since AT&T's WarnerMedia and Discovery Inc. merged in April 2022.
"It's been a great creative renaissance at Warner Bros., and you see it across our entire company, and you'll continue to see it," Zaslav told analysts. "When you look at '27 on the motion picture side, it's stunning. It's all coming together for Warner and for HBO as well. HBO has never been stronger."
Zaslav pointed to the streak that Warner Bros. Pictures has enjoyed with nine movies in the past 14 months that have opened at No. 1 at the box office. 2025's 'A Minecraft Movie,' 'Sinners,' 'Weapons,' and 'One Battle After Another' are good examples of the range of franchise and prestige fare that the studio has balanced since Michael De Luca and Pam Abdy took over as film studio chiefs.
"I don't think anybody is investing in original content and television and motion pictures the way we have," Zaslav enthused.
Perrette, who oversees global streaming and gaming for WBD, noted that HBO is banking on some 10 years of Harry Potter-branded series starting next year. "We have great visibility to a strengthening content plate, which is at the core of everything we do," Perrette said.
As for WBD's gaming business, Perrette acknowledged that '2025 was a year of reset' after the division got 'distracted going after too many IPs with too broad a set of studios.' This year, WBD is slated to release a new 'Lego Batman' game and a 'Game of Thrones'-themed mobile game dubbed 'Dragon Fire.'
Perrette hinted at bigger things to come next year.
"The real fruits will start coming in in '27-'28 when we return to some of our biggest franchises," he said. Perrette didn't specify any titles, but it's likely he was referencing the push for the studio to release a 'Hogwarts Legacy' game sequel that will coincide with the debut of HBO's Harry Potter series.
