Warner Bros Discovery plans two-way split aiming for potential cable deal

(Reuters) -Warner Bros Discovery (NASDAQ:WBD ) on Thursday decided to separate its declining cable TV business from the streaming and studio operations, laying the groundwork for a potential sale or spinoff of its TV business as cord-cutting picks up pace.

Its shares rose about 7% in early trading as the company said the new corporate structure will provide more options for further value creation at both the divisions. It expects to complete the split by mid-2025.

Media companies are considering options for their cable TV businesses as a large-scale shift by consumers toward streaming has slammed growth in traditional TV, which has long been the industry's cash cow.

Comcast (NASDAQ:CMCSA ) last month plans to split most of its NBCUniversal cable networks into a new public company, while Comedy Central and Nickelodeon owner Paramount Global had earlier this year agreed to merge with streaming-era upstart Skydance Media.

Under the new structure for Warner Bros Discovery, broadcast networks like TNT, Animal Planet and CNN will be housed in a unit called "Global Linear Networks".

Streaming platforms Max and Discovery+ will be under a division along with film studios, including Warner Bros Pictures and New Line Cinema.

The company in August wrote down the value of its TV assets by more than $9 billion due to uncertainty around fees from cable and satellite distributors and sports rights renewals.



CEO David Zaslav said last month he expects a friendlier environment for deal-making under the incoming Trump administration, opening the door to industry consolidation.

Earlier this week, the company signed a multi-year distribution deal with Comcast that paves the way for the European launch of its Max streaming service, and resolves a dispute over an upcoming "Harry Potter" TV series.

Source: Investing.com