Both Paramount and Warner Bros. Discovery are reporting quarterly earnings this week under the shadow of a stalled $110 billion merger that neither company can discuss freely.
Paramount is due to report Tuesday afternoon. WBD reports before the market opens Thursday. In what Deadline described as an alternate timeline, the two would have been reporting as a single company by now. Instead, attorneys general from 12 states, joined by the Writers Guild of America, filed an antitrust challenge that put the deal on hold. A judge is expected to set a trial date soon.
Analysts do not expect strong numbers from either company. Consensus estimates project Paramount's revenue to come in roughly flat at around $6.9 billion, with earnings per share dropping to 17 cents from 46 cents a year ago. WBD is projected to post revenue of $9.2 billion, down from $9.8 billion in the same quarter last year, when the company still had NBA broadcast rights. WBD is also expected to swing to a loss of 10 cents per share, reversing year-earlier earnings of 63 cents.
Stock prices reflect the uncertainty. WBD shares have fallen 7% since the Paramount deal was announced in late February. Paramount shares have dropped 40% in that same period, landing near $8.
Streaming is a relative bright spot for both companies. Paramount+ added 700,000 new subscribers in the quarter, slightly below internal forecasts despite the launch of UFC programming, bringing its total to 79.6 million. HBO Max, helped by expansion into international markets, topped 140 million subscribers in the first quarter. The company projects it will end 2026 at 150 million or higher.
Linear television remains a drag. Both companies continue to see declines in their cable and broadcast operations, and yet a merged company would depend on those same assets to pay down debt. Alleged over-concentration of cable networks is reportedly one of the core arguments in the state attorneys general lawsuit.
The broader industry appears divided over the deal's consequences. Some inside and outside the companies believe the merger would harm a legacy studio and its workers. Others, including some within both companies, fear that a blocked deal could leave each company in a worse position independently.
WBD had previously floated a plan to split into two separate companies, a path Comcast is currently taking for a second time. That option could still theoretically resurface if the merger is blocked, though no formal steps have been taken in that direction.
Both companies are expected to deflect merger-related questions during their earnings calls, as they did when reporting first-quarter results in May.
