The absence of a longtime companion tends to announce itself in stages, and Warner Bros. Discovery is now well into the phase where the empty chair at the table has become impossible to ignore.
The company reported a $2.9 billion loss for the first quarter, a figure that includes $1.3 billion in restructuring expenses and reflects what happens when a network that built its identity around professional basketball no longer has any professional basketball to show. Advertising revenue fell 11 percent, with executives attributing much of the decline to the departure of the N.B.A., which took its talents to ESPN, NBC and Amazon last year after more than four decades on TNT.
"The absence of the N.B.A. negatively impacted the year-over-year growth rate," the company said, in what might qualify as the understatement portion of the earnings call.
The broader linear television portfolio, which includes TBS and a collection of cable networks that were once considered quite valuable, saw revenue fall 8 percent to $4.4 billion. Distribution revenue dropped 7 percent, driven largely by a 10 percent decline in domestic pay television subscribers — a figure that has become as predictable as the turning of the leaves, if somewhat less picturesque.
Complicating the quarter's mathematics was a $2.8 billion termination fee paid to Netflix in late February, when the streaming giant withdrew from bidding for Warner. The eventual winner, Paramount Skydance, agreed to cover that payment, but Warner must still carry the obligation on its balance sheet in the event the Paramount deal collapses. (Accounting, it turns out, requires planning for disappointment.)
Looking ahead, the company expects the N.B.A. void to create a 16 percent headwind to streaming advertising revenue in the second quarter.
The driveway, it seems, will remain empty for some time.
Original story published in sportsbusinessjournal.com: "Warner Bros. Discovery continues feeling loss of NBA in Q1 loss"