
Shares dive 13% after restructuring announcement

Follows course taken by Comcast's new spin-off company

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Challenges seen in selling debt-laden direct TV networks
(New throughout, includes information, background, remarks from market insiders and experts, updates share costs)
By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday chose to separate its decreasing cable television organizations such as CNN from streaming and studio operations such as Max, preparing for a prospective sale or spinoff of its TV organization as more cable customers cut the cord.
Shares of Warner jumped after the business said 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 considering alternatives for fading cable television services, a long time golden goose where revenues are eroding as millions of customers welcome streaming video.
Comcast last month unveiled plans to split most of its NBCUniversal cable television networks into a brand-new public business. The brand-new business would be well capitalized and placed to obtain other cable networks if the industry combines, one source told Reuters.
Bank of America research study analyst Jessica Reif Ehrlich composed that Warner Bros Discovery's cable tv possessions are a "very logical partner" for Comcast's brand-new spin-off business.
"We strongly believe there is capacity for fairly substantial synergies if WBD's direct networks were combined with Comcast SpinCo," wrote Ehrlich, using the market term for conventional tv.

"Further, we think WBD's standalone streaming and studio possessions would be an appealing takeover target."
Under the brand-new structure for Warner Bros Discovery, the cable television organization consisting of TNT, Animal Planet and CNN will be housed in a system called Global Linear Networks.

Streaming platforms Max and Discovery+ will be under a different division together with film studios, consisting of Warner Bros Pictures and New Line Cinema.
The restructuring reflects an inflection point for the media market, as financial investments in streaming services such as Warner Bros Discovery's Max are finally settling.
"Streaming won as a habits," 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 business structure will distinguish growing studio and streaming assets from successful however shrinking cable television business, offering a clearer investment photo and likely setting the stage for a sale or spin-off of the cable unit.
The media veteran and advisor predicted 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 positioning the company for its next chess move, composed MoffettNathanson expert Robert Fishman.
"The concern is not whether more pieces will be moved around or knocked off the board, or if additional debt consolidation will take place-- it refers who is the purchaser and who is the seller," composed Fishman.
Zaslav signified that situation 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 engaged in merger talks with Paramount late last year, though an offer never emerged, according to a regulative filing last month.
Others injected a note of care, noting Warner Bros Discovery brings $40.4 billion in debt.
"The structure change would make it much easier for WBD to sell its direct TV networks," eMarketer expert Ross Benes stated, referring to the cable television organization. "However, finding a buyer will be difficult. The networks owe money and have no indications of development."
In August, Warner Bros Discovery composed down the value of its TV properties by over $9 billion due to uncertainty around costs from cable television and satellite distributors and sports betting rights renewals.
Today, the media company revealed a multi-year offer increasing the overall fees Comcast will pay to distribute Warner Bros Discovery's networks.
Warner Bros Discovery is sports betting the Comcast agreement, together with an offer reached this year with cable and broadband provider Charter, will be a design template for future settlements with suppliers. That might assist 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)
