Warner Bros. Discovery (WBD) said Thursday it's "hopeful" for a deal with the NBA after a Wall Street Journal report said the company is at risk of losing media rights for the league to competitor NBCUniversal (CMCSA).

"We've enjoyed a strong partnership with the NBA for almost four decades. We're in continuing conversations with them now, and we're hopeful that we'll be able to reach an agreement that makes sense for both sides," WBD CEO David Zaslav said on the company's first quarter earnings call.

The executive said the company has the ability to match third-party offers before the NBA enters into any agreements, adding it's prepared "for the various potential outcomes." He would not elaborate on where current talks stand today.

The comments come after the company reported first quarter earnings that missed expectations on both the top and bottom lines. Free cash flow jumped amid aggressive cost cutting, while the company's linear TV business continued to decline.

Revenue came in at $9.96 billion, missing Bloomberg consensus expectations of $10.27 billion — a 7% drop compared to the $10.70 billion seen in Q1 2023. The company reported an adjusted loss per share of $0.40 versus a loss of $0.44 in the year-earlier period.

WBD, like other legacy media companies, has grappled with an unfavorable ad environment. Network advertising revenue tumbled by 11% in Q1 from the year-earlier period. The company reported network ad revenue of $1.99 billion, missing Bloomberg expectations of $2.01 billion.

The studios business also struggled, despite high-profile movies like "Dune 2." The segment was dragged down by games, with "Suicide Squad: Kill the Justice League" underperforming, especially compared to last year's "Hogwarts Legacy" release.

Revenue for the segment came in at $2.82 billion, a 13% year-over-year decline excluding foreign exchange headwinds. This missed estimates of $3.01 billion.

Free cash flow served as a bright spot in the quarter, soaring to $390 million and beating Bloomberg consensus expectations of $239 million. The company reported negative free cash flow of nearly $1 billion in the year-earlier period.

The company's direct-to-consumer (DTC) streaming business also outperformed. It added 2 million Max subscribers in the quarter, ahead of Bloomberg consensus expectations of 1.25 million and also ahead of the 1.6 million subcribers added in Q1 2023.

Streaming advertising revenue jumped to $175 million, beating Bloomberg estimates of $157 million and up 70% from the $103 million the company reported in the year-ago period.

The direct-to-consumer (DTC) division was also profitable in the quarter, with a $86 million profit, a $36 million year-over-year improvement. In February, the company revealed its direct-to-consumer streaming unit turned a profit for full year 2023, posting $103 million in EBITDA compared with a loss of about $2.1 billion in full year 2022.

"With our strong start in Q1, I expect us to remain profitable in the DTC segment during 2024, despite the heavy launch investments," WBD CFO Gunnar Wiedenfels said on the call. "I remain fully confident in our path to achieve our $1 billion-plus EBITDA target for 2025 and our growth ambitions thereafter."

Wall Street analysts have referenced several tailwinds heading into the second half of the year, which include WBD's upcoming sports streaming partnership with Disney (DIS) and Fox (FOXA), along with its Max streaming service recently launching in markets outside of the US, including Latin America and Europe.

And on Wednesday, WBD and Disney said they would offer a bundle of the Disney+, Hulu, and Max streaming services in the US starting this summer. Customers will be able to sign up for the package, with or without ads, on any of the three platforms.

Separately, the company is reportedly aiming for more cost cuts and further streaming price hikes. According to Bloomberg, cost-cutting plans could include layoffs after WBD slashed 2,000 jobs over the past year. The company did not respond to Yahoo Finance's request for comment.

Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at [email protected].

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