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Shares dive 13% after reorganizing statement

Follows course taken by Comcast's new spin-off company
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Challenges seen in offering debt-laden linear TV networks

(New throughout, adds information, background, remarks from market insiders and experts, updates share rates)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday decided to separate its decreasing cable television services such as CNN from streaming and studio operations such as Max, preparing for a possible sale or spinoff of its TV service as more cable customers cut the cord.

Shares of Warner jumped after the company said the brand-new structure would be more deal friendly and it anticipated to finish the split by the middle of 2025. Warner shares closed at $12.49, up more than 15%.

Media companies are considering alternatives for fading cable television companies, a long time golden goose where revenues are deteriorating as millions of customers embrace streaming video.

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

Bank of America research study expert Jessica Reif Ehrlich composed that Warner Bros Discovery's cable television properties are a "really logical partner" for Comcast's new spin-off business.

"We strongly think there is capacity for relatively sizable synergies if WBD's linear networks were combined with Comcast SpinCo," composed Ehrlich, utilizing the industry term for standard television.

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

Under the new structure for Warner Bros Discovery, the cable television service including TNT, Animal Planet and CNN will be housed in a system called Global Linear Networks.

Streaming platforms Max and Discovery+ will be under a separate department in addition to movie studios, consisting of Warner Bros Pictures and New Line Cinema.

The restructuring reflects an inflection point for the media market, as investments in streaming services such as Warner Bros Discovery's Max are finally settling.

"Streaming won as a habits," said Jonathan Miller, primary executive of digital media investment business Integrated Media. "Now, it's winning as an organization."

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's new corporate structure will distinguish growing studio and streaming properties from lucrative but shrinking cable service, providing a clearer financial investment picture and most likely setting the phase for a sale or spin-off of the cable system.

The media veteran and consultant forecasted Paramount and others may take a similar path.

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 placing the company for its next chess relocation, composed MoffettNathanson expert .

"The concern is not whether more pieces will be walked around or knocked off the board, or if additional combination will take place-- it is a matter of who is the buyer and who is the seller," composed Fishman.
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Zaslav indicated that circumstance throughout Warner Bros Discovery's financier call last month. He stated he prepared for President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media industry combination.

Zaslav had actually engaged in merger talks with Paramount late last year, though an offer never emerged, according to a regulatory filing last month.

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

"The structure modification would make it easier for WBD to sell off its linear TV networks," eMarketer analyst Ross Benes said, referring to the cable television TV service. "However, discovering a purchaser will be difficult. The networks are in debt and have no indications of development."

In August, Warner Bros Discovery wrote down the worth of its TV possessions by over $9 billion due to uncertainty around fees from cable and satellite suppliers and sports betting rights renewals.

Today, the media business announced a multi-year deal increasing the total costs Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is sports betting the Comcast contract, together with an offer reached this year with cable television and broadband supplier Charter, will be a template for future settlements with distributors. That might assist stabilize prices 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)