Shares jump 13% after restructuring statement
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Follows path taken by Comcast's brand-new spin-off company
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Challenges seen in offering debt-laden linear TV networks

(New throughout, adds information, background, remarks from industry experts and analysts, updates share prices)
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By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday chose to separate its declining cable television companies such as CNN from streaming and studio operations such as Max, laying the foundation for a prospective sale or spinoff of its TV business as more cable television subscribers cut the cord.

Shares of Warner jumped after the business stated the new structure would be more deal friendly and it expected to complete the split by the middle of 2025. Warner shares closed at $12.49, up more than 15%.

Media companies are thinking about options for fading cable television services, a longtime money cow where profits are eroding as millions of customers welcome streaming video.

Comcast last month unveiled strategies to divide the majority of its NBCUniversal cable television networks into a new public company. The brand-new business would be well capitalized and placed to acquire other cable television networks if the market consolidates, one source informed Reuters.

Bank of America research study analyst Jessica Reif Ehrlich composed that Warner Bros Discovery's cable tv possessions are a "extremely logical partner" for Comcast's brand-new spin-off company.

"We strongly believe there is capacity for relatively sizable synergies if WBD's linear networks were integrated with Comcast SpinCo," composed Ehrlich, utilizing the market term for conventional television.

"Further, our company believe WBD's standalone streaming and studio properties would be an attractive takeover target."

Under the brand-new structure for Warner Bros Discovery, the cable TV business including TNT, Animal Planet and CNN will be housed in an unit called Global Linear Networks.

Streaming platforms Max and Discovery+ will be under a separate department along with film studios, consisting of Warner Bros Pictures and New Line Cinema.
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The restructuring shows an inflection point for the media market, as financial investments in streaming services such as Warner Bros Discovery's Max are lastly settling.

"Streaming won as a habits," stated Jonathan Miller, president of digital media investment firm Integrated Media. "Now, it's winning as a service."

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's new business structure will separate growing studio and streaming possessions from successful but shrinking cable television TV business, giving a clearer investment picture and most likely setting the stage for a sale or of the cable television system.

The media veteran and consultant forecasted Paramount and others might take a similar course.

CEO David Zaslav, a veteran deal-maker who led Discovery through its acquisition of Scripps Networks Interactive before acquiring the even larger target, AT&T's WarnerMedia, is positioning the business for its next chess relocation, composed MoffettNathanson analyst Robert Fishman.
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"The concern is not whether more pieces will be walked around or knocked off the board, or if more combination will take place-- it refers who is the buyer and who is the seller," composed Fishman.

Zaslav signaled that circumstance throughout Warner Bros Discovery's financier call last month. He said he anticipated President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to media market consolidation.

Zaslav had actually participated in merger talks with Paramount late last year, though a deal never emerged, according to a regulative filing last month.

Others injected a note of care, keeping in mind Warner Bros Discovery brings $40.4 billion in financial obligation.

"The structure change would make it much easier for WBD to sell off its linear TV networks," eMarketer analyst Ross Benes stated, referring to the cable company. "However, discovering a purchaser will be tough. The networks are in financial obligation and have no signs of growth."

In August, Warner Bros Discovery made a note of the worth of its TV assets by over $9 billion due to unpredictability around costs from cable and satellite distributors and sports betting rights renewals.
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Today, the media business announced a multi-year offer increasing the general costs Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is wagering the Comcast contract, together with an offer reached this year with cable and broadband company Charter, will be a template for future settlements with suppliers. That could help support pricing for the domestic pay TV market. (Reporting by Deborah Sophia and Aditya Soni in Bengaluru, Dawn Chmielewski in Los Angeles; Editing by Shilpi Majumdar, Arun Koyyur, Keith Weir and David Gregorio)
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