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Shares dive 13% after reorganizing statement
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Follows course taken by Comcast's new spin-off business
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Challenges seen in selling debt-laden linear TV networks
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(New throughout, adds information, background, comments from market experts and experts, updates share prices)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

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

Shares of Warner leapt after the business said the brand-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 business are considering alternatives for fading cable television organizations, a long time golden goose where incomes are eroding as countless consumers embrace streaming video.

Comcast last month revealed strategies to split most of its NBCUniversal cable television networks into a new public company. The new company would be well capitalized and positioned to get other cable networks if the industry consolidates, one source informed Reuters.

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

"We strongly believe there is capacity for relatively large synergies if WBD's direct networks were integrated with Comcast SpinCo," composed Ehrlich, using the market term for conventional tv.

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

Under the brand-new structure for Warner Bros Discovery, the cable television company consisting of 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.

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

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

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's new will separate growing studio and streaming assets from rewarding however diminishing cable company, offering a clearer investment photo and likely setting the phase for a sale or spin-off of the cable system.

The media veteran and consultant anticipated Paramount and others may take a comparable 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 placing the business for its next chess relocation, composed MoffettNathanson analyst Robert Fishman.

"The concern is not whether more pieces will be moved or knocked off the board, or if more consolidation will take place-- it is a matter of who is the purchaser and who is the seller," composed Fishman.

Zaslav signaled that circumstance during Warner Bros Discovery's investor call last month. He stated he prepared for President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media market debt consolidation.

Zaslav had engaged in merger talks with Paramount late in 2015, though a deal never ever emerged, according to a regulatory 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 simpler for WBD to sell its linear TV networks," eMarketer analyst Ross Benes said, describing the cable television TV service. "However, discovering a buyer will be difficult. The networks are in debt 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 uncertainty around fees from cable and satellite suppliers and sports betting rights renewals.
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This week, the media company announced a multi-year deal increasing the general fees Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is sports betting the Comcast agreement, together with an offer reached this year with cable television and broadband supplier Charter, will be a design template for future settlements with suppliers. That could help stabilize 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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