Too Much TV: Paramount Skydance Reports Earnings, WBD To Follow Thursday Morning

Here’s everything you need to know about the world of television for Wednesday, February 25th, 2026:

PRODUCTION NOTES
The newsletter is running later today as I work on a couple of stories. And I also wanted to see where the Paramount Skydance numbers came in. Hopefully this merger stuff will slow down soon, so I can get back to other television news.

PARAMOUNT'S KINDA, JUST OKAY EARNINGS NUMBERS
Paramount Skydance Corp. reported fourth-quarter sales and earnings that beat Wall Street projections, with revenue of $8.15 billion and adjusted operating income of $612 million. The analyst consensus was revenue of $8.12 billion. Adjusted operating income before interest, taxes, depreciation and amortization totaled $612 million. Investors were expecting $561.9 million. 

If you wonder what is driving David Ellison's ambitions to own Warner Bros. Discovery, one reason is that when you look at the overall picture at PSKY, the company's only profitable division right now is its conventional television group. While sales at the company’s TV unit fell 5% to $4.67 billion last quarter, aggressive cost-cutting helped bring more than $1 billion in adjusted earnings. And that hints at one of the ways PSKY would handle a merger with WBD - substantially cut costs on the linear side of the business to drive as much revenue as possible from a part of the business that is slowly declining.

Paramount’s streaming business is a bit challenging to parse financially without more numbers. The division posted revenue of $2.21 billion, compared to the analysts' projection of $2.29 billion. The Paramount+ streaming service added around one million subscribers to boost its subscriber base to 78.9 million. Of note, the company’s total subscriber count no longer includes free trial subscribers, who totaled 1.2 million as of the end of the third quarter.

But it's not clear how much of that increase is due to the growing number of partnerships/bundles that Paramount has added over the recent couple of years. That is important, because the subscription revenue from being part of a bundle is less than what the company would receive directly. That includes both bundles from deals with telecoms, its partnership with Walmart+ or subscriptions through options such as Amazon Channels. It's also worth noting Paramount+ increased its base subscription price in January a dollar, to $9 a month.

The Paramount Pictures movie studio reported revenue of $1.26 billion, while Wall Street estimated $1.24 billion.

And as for the ongoing battle for Warner Bros. Discovery (WBD), the company declined to answer analyst questions about the bid during Wednesday’s earnings call. But in the letter to shareholders, CEO David Ellison did mention the merger talks tangentially:

“We approach investment decisions at Paramount, including our effort to acquire WBD, through the lens of our North Star priorities and financial goals,” wrote Ellison. “While we are confident in our standalone strategy and growth trajectory for Paramount, we view WBD as an accelerant to achieving these goals more quickly, in a way that is economically compelling for Paramount shareholders.”

Tomorrow, Warner Bros. Discovery releases its quarterly earnings numbers before the bell, and I'll be back after those numbers are posted to wade through it all. I don't expect to hear much about the various merger talks. At least, not anything beyond "we continue to work to maximize shareholder value."

AND MORE MERGER NEWS
* Politico is reporting that Netflix co-CEO Ted Sarandos will have a meeting at the White House on Thursday to discuss issues surround the streamer’s accepted $82.7 billion all-cash acquisition of Warner Bros. Discovery’s streaming and studio assets. There will also apparently be some discussion of the future of Netflix board member Susan Rice, who President Trump demanded be fired over the weekend. It's not clear if the meeting will include the President, although I would be shocked if he isn't part of the discussion.

* Netflix CFO Spence Neumann will participate in a Q&A session at the Morgan Stanley Technology, Media & Telecom Conference on Wednesday, March 4th.

A NETFLIX/WBD DEAL IS EVEN MORE COMPLICATED THAN YOU THINK
A lot of people seem to think that once Netflix wins approval from the various anti-trust enforcers in the U.S. and elsewhere, both sides can just sign some papers and the merger will be finalized. But that is nowhere near the case.

Regardless of the ultimate cost to Netflix, the overall structure of the proposed deal is complicated even by the standards of a typically complex media merger. 

The parties to the merger deal include Netflix, a Netflix wholly-owned subsidiary named Nightingale Sub, Inc., Warner Bros Discovery, and a new WBD wholly-owned subsidiary called New Topco 25, Inc., (which is referred in the merger agreement as "NewCo). 

NewCo will merge with WBD, with WBD surviving as the wholly-owned subsidiary of NewCo, which will be owned by the current WBD shareholders. After that merger, WBD will undertake an internal reorganization, which will separate separation WBD’s Global Linear Networks segment and certain other assets and liabilities.  As a result of which, NewCo will hold WBD’s Streaming and Studios segments into what is described in the merger agreement as "SpinCo."

A newly formed entity (“Discovery Global”) will hold the SpinCo Business, and WBD will distribute all of the issued and outstanding stock of Discovery Global to the holders of the outstanding shares of WBD Common Stock at the effective time of the Separation and Distribution. Each share of WBD Common Stock will be converted into one share of NewCo common stock of the same class (“NewCo Common Stock”), and NewCo will be renamed “Warner Bros. Discovery, Inc." At that time, WBD stockholders will receive $27.75 for each share of WBD Common Stock, without interest, subject to any Per Share Merger Consideration Reduction.

So when it is over, Netflix (through its Nightingale subsidiary) will own NewCo, and WBD’s Global Linear Networks will exist as a standalone entity. The streaming service Discovery+ will be part of the Global Linear Networks division along with Bleacher Reports and the linear channel Turner Classic Movies will become part of NewCo.

Why make it this complicated? Taxes. Or to be precise, attempts to lower the tax burden on both companies, as well as company executives and larger shareholders.

ODDS AND SODS
* If It's Tuesday, It's Murder premieres Tuesday, March 31st on Hulu. Here is a first video look at the series and here is a photo gallery of images. Here is the brief logline: "If It's Tuesday, It’s Murder is a murder mystery about an organized trip to Lisbon by a peculiar group of Spanish tourists that turns into an investigation into a mysterious murder, forcing its protagonists to bring out their detective skills to discover who is behind the crime."

* Matt Dillon will star in the upcoming MGM+ TV series adaptation of The Magnificent Seven. 

* The Tulsa King spin-off NOLA King is being revamped and moved to San Francisco, where the show will be known as Frisco King. Although no one who lives there ever refers to it as "Frisco."

* Season four of Sullivan's Crossing premieres Monday, April 10th on The CW.

READER FEEDBACK
There is a lot of interest in the battle for Warner Bros. Discovery and here is some of what I've heard from all of you:

"Excellent breakdown - the PSKY vs Netflix framing is really helpful. The matching rights point is what makes this whole saga feel pre-determned to me; Netflix almost certainly won't let a content library that scale walk out the door. The real intrigue is how they value the GlobalSpin spinoff assets, because that's where PSKY has a genuine argument. Watching Zaslav's employee message closely, that tone suggests they've already made up their minds."

--Yuji

I agree with you, it's hard to imagine a scenario in which Netflix doesn't ultimately win this. And despite what a lot of people in Hollywood think, I believe it's a better outcome for the industry than WBD being acquired by a company that is going to end up carrying $100 billion in overall debt. At that level, PSKY would be cutting costs at a level that would leave WBD nothing more than name on the wall.

The GlobalSpin valuation question is an interesting one. Paramount wants to value it as close to nothing, but as I wrote in yesterday's email, comparing Versant to GlobalSpin isn't a true apples-to-apples situation. But there is a lot of wiggle room there when it comes to valuing the WBD spin-off and I suspect that is going to be Paramount's focus if it loses. In part, because the lower they can push the valuation, the cheaper the cost for them to buy it if they lose out to Netflix on the studio and streaming assets.

It's also not clear where all of those international sports rights are going to end up. In theory, they should go to the spin-off company. But both WBD and Netflix have been dodging that question.

I am surprised that you did not mention CNN in your discussion today. It seems like an important part of the negotiations. If Paramount wins what will they do with CNN in terms of its politics? djt no doubt will put pressure on Paramount. 

If Netflix wins, CNN is split off and would seem to be an important part of the Discovery package.  

Gary M.

There are a number of reasons why Netflix didn't want the WBD linear channels and CNN is a primary one. It just complicates matters and it's a subject that matters a lot to Trump. I think it depends on who ends up acquiring that spin-off division. If it's PSKY, it's likely to push the network strongly to the right. As for bidders, I don't know of any logical buyers for the entire spin-off division. A couple of people have made offers for just CNN, but so far, WBD has consistently refused to discuss the idea.

TWEET OF THE DAY



WHAT'S COMING TONIGHT AND TOMORROW

WEDNESDAY, FEBRUARY 25TH:
* Dinosaur Season Two Premiere (Hulu)
* Lost Women Of Alaska (Investigation Discovery)
* Nova: Stone Age Temple Mystery (PBS)
* Paul McCartney: Man On The Run (Prime Video)
* Scrubs Series Premiere (ABC)
* Survivor Season Twenty Five Premiere (CBS)
* The Bluff (Prime Video)
* The Greatest Average American Series Premiere (ABC)

THURSDAY, FEBRUARY 26TH:
* Baki-Dou: The Invincible Samurai Series Premiere (Netflix)
* Bridgerton (Netflix)
* Crap Happens (Netflix) 
* Deadwater Fell Season One Premiere (BritBox)
* Elsbeth Spring Premiere (CBS)
* Georgie & Mandy's First Marriage Spring Premiere (CBS)
* Ghosts Spring Premiere (CBS)
* House Of Villains Season Premiere (Peacock)
* Matlock Spring Premiere (CBS)
* Mysteries Unearthed With Danny Trejo Season Premiere (History)
* The Gray House Series Premiere (Prime Video)
* The Proof Is Out There: Alien Edition (History)

SEE YOU THIS THURSDAY!