Warner Bros Discovery Inc

Paramount Skydance is facing pushback from a collection of US attorneys general in its proposed acquisition of rival Warner Bros. Discovery. Media analyst Evan Shapiro says the deal will remain in limbo unless Paramount backs out, and that Larry Ellison is personally backing $40 billion dollars of this $111 billion dollar deal. Shapiro notes Oracle stock has dropped 60% since bidding began, and if Oracle's debt is rated junk, Ellison's personal stock gets locked up, putting the Ellisons in financial hot water. He adds that Netflix, Apple, or a spun-out NBC could swoop in if Paramount walks away, which he thinks is increasingly likely given a $7 billion breakup fee.

Paramount Skydance extended the expiration dates of its previously announced exchange and tender offers to align more closely with its proposed acquisition of Warner Bros. Discovery. The updated timing is intended to keep the offers synchronized with the broader transaction process for the planned Warner Bros. Discovery deal. The move indicates that Paramount Skydance is continuing to prepare for a significant consolidation step in the media and entertainment industry. The company has a market value of about $11.4 billion, and the next clear checkpoint is how it updates investors on the Warner Bros. Discovery timetable and related financing at or before its next quarterly earnings release.

Warner Bros. Discovery reported second-quarter revenue of $8.72 billion, missing analyst estimates of $9.18 billion, while adjusted EPS of $0.06 significantly beat expectations of a $0.11 loss. Management attributed the quarter's mixed performance to strength in global streaming, particularly HBO Max, and challenges in the studio segment due to a lighter film slate. During the earnings call, analysts questioned the sustainability of HBO's scripted content pipeline, the path to $3 billion in studio EBITDA, the ramp-up to 19 films next year, the severe linear advertising decline, and the company's focus during the Paramount Skydance merger process. CEO David Zaslav highlighted strong employee commitment and execution during the merger period.

Paramount Skydance is willing to sell CNN if that would resolve the antitrust lawsuit blocking its $110 billion acquisition of Warner Bros. Discovery. Chief legal officer Makan Delrahim said at Politico's California Agenda conference that a CNN sale is on the table to make the deal look less monopoly-like. The suit, led by California Attorney General Rob Bonta and 11 other states, argues the combined media behemoth could raise prices and reduce competition. Delrahim also became the first Paramount Skydance official to publicly state the company may quit California, citing a fiduciary duty to shareholders and noting potential savings of $500 million per year in taxes. The merger has already secured clearances from U.S. federal regulators, the U.K., the EU, China, and elsewhere, leaving the lawsuit as the last major hurdle.

The Trade Desk is facing rising competitive pressure as Amazon and Google roll out new advertising products that threaten its core demand-side platform model. Amazon is shifting ad tech services toward higher margin AWS infrastructure, working on AI driven advertising with Warner Bros. Discovery, and reviewing its DSP, which could reshape how brands buy digital ads. Google is developing a Buyer Direct program that would let advertisers purchase media without using a traditional DSP, directly challenging the role The Trade Desk plays in digital ad buying. These moves introduce fresh uncertainty for The Trade Desk's long term business model and could alter competitive dynamics for independent ad tech platforms. Recent earnings show net income and EPS under pressure even as sales sit at US$715.06 million for Q2 and US$1.40b for the first half of 2026, with management guiding Q3 2026 revenue of at least US$650 million.

Paramount Skydance Corporation's roughly $110 billion deal to buy Warner Bros. Discovery remains frozen after the two companies agreed not to close it until five days after a trial verdict or June 1, 2027, whichever comes first. A coalition of 12 states led by California, plus the Writers Guild of America, sued to block the deal on antitrust grounds, and the judge overseeing the case has already signaled real doubts about its legality. Paramount owes Warner shareholders a $650 million ticking fee every quarter starting September 30 until the deal closes, and if it collapses entirely, Paramount owes a $7 billion breakup fee on top of the $2.8 billion it already paid Netflix to win the original bidding war. Paramount wants the trial to start in November 2026, while the states and the writers' union want April 2027. The deal has already cleared the Justice Department, the European Union, and China, along with 65 jurisdictions worldwide overall, according to CEO David Ellison, and Paramount hired litigator Beth Wilkinson, who previously beat state antitrust lawyers defending Microsoft's $75 billion Activision Blizzard purchase. However, Judge Araceli Martínez-Olguín has already written that the combined companies' market share alone lets the court presume the merger likely violates antitrust law, and Paramount's stock is down over 37% this year as of August 3, 2026, with the firm having already spent more than $160 million on legal fees linked to the bid. Warner Bros. Discovery had 94 hedge fund holders as of Q1 2026, up from 86 the quarter before, while Paramount had just 30 holders, down from 37.

Paramount Skydance reported second-quarter 2026 results with total revenue of $6.9 billion, up 1% year over year, and raised its full-year adjusted EBITDA guidance to a range of $3.8 billion to $3.9 billion. Adjusted EBITDA for the quarter was $1.1 billion, a 27% increase driven by profitability gains across all three business segments and realized merger-related synergies. Net earnings were $41 million, or $0.04 per diluted share, including $153 million in transaction-related costs associated with the pending Warner Bros. Discovery merger. Paramount+ added 2 million net subscribers to reach 81.6 million, with revenue growing 16% to $2.1 billion, while the company expects to achieve $2.7 billion in run-rate efficiencies by year-end. Management also noted that incremental financing costs for the Warner Bros. Discovery deal include bridge fees of $8 million to $9 million per month starting October 1 if the transaction does not close by the end of the third quarter.

Nine out of ten Communication Services companies that reported quarterly results this week exceeded earnings per share expectations, while The Trade Desk missed. The Walt Disney Company posted adjusted earnings per share of $2.06, beating the $1.86 analyst estimate, with revenue rising 7% to $25.25 billion. Warner Bros. Discovery reported better-than-feared profit but missed on revenue, as its streaming segment grew 10% and studio revenue fell 39%. The Trade Desk shares tumbled about 22.5% after missing both earnings and revenue estimates, with revenue rising 3% to $715 million and adjusted earnings per share of $0.34. On the revenue side, six of the ten companies beat consensus estimates.

Warner Bros. Discovery is scheduled to announce its second-quarter earnings results on Thursday, August 6th, before market open. The consensus earnings per share estimate is negative 11 cents, and the consensus revenue estimate is 9.21 billion dollars, representing a 6.1 percent decline year-over-year. Over the last three months, EPS estimates have seen three upward revisions and six downward revisions, while revenue estimates have seen three upward revisions and nine downward revisions.

Paramount Skydance raised its full-year 2026 adjusted EBITDA target to between $3.8 billion and $3.9 billion, citing efficiencies from the Skydance combination, with total expected savings from that deal pegged at $3 billion. The company still projects total 2026 revenue of $30 billion, representing 4% growth year over year. Second-quarter total revenue came in at $6.91 billion, slightly above Wall Street expectations of $6.88 billion, while net earnings attributable to the company were $41 million, or 4 cents per share, down from $57 million, or 8 cents per share, a year earlier. The direct-to-consumer segment, which includes Paramount+, BET+, and Pluto TV, posted a 9% revenue gain to $2.47 billion, the film division grew 16% to $1.31 billion, and TV media slipped 9% to $3.13 billion. Paramount+ added 2 million subscribers to reach 81.6 million globally, and the company guided for third-quarter total revenue between $6.95 billion and $7.15 billion with subscriber growth holding roughly steady. CEO David Ellison also addressed the proposed acquisition of Warner Bros. Discovery, which faces an antitrust lawsuit from a group of U.S. state attorneys general and has an extended outside closing deadline of June 2027, expressing confidence the deal will be completed.

US entertainment giant Paramount Skydance reported mixed second-quarter results, as revenue growth in its streaming and studio segments offset a decline in its television unit. Revenue rose 1 percent to 6.91 billion dollars, topping the 6.88 billion dollars expected by analysts polled by LSEG, but net profit came in at 41 million dollars, or 4 cents per share, missing the forecast of 109 million dollars, or 9 cents per share. Streaming revenue grew 9 percent year-on-year to roughly 2.5 billion dollars, with flagship service Paramount Plus adding 2 million subscribers to reach 81.6 million. Meanwhile, television revenue fell 9 percent to 3.1 billion dollars. The company is pursuing a 110 billion dollar acquisition of Warner Bros. Discovery, but 12 states have sued to block the deal, and the parties have agreed to pause proceedings pending a federal district court ruling.

The consensus fair value estimate for Paramount Skydance has fallen from $14.57 to $11.79, a roughly 19% decline, reflecting lower revenue growth, net margin, and a higher discount rate. The planned $110 billion Warner Bros. Discovery deal has drawn sharply divided analyst views, with Seaport Research highlighting workable regulatory conditions and a $31 per share cash offer, while Arete slashed its price target to $2 from $14 and moved the stock to Sell, citing high debt costs, restrictive covenants, and challenging media merger history.