Warner Bros Discovery to Separate Cable TV Business from Streaming and Studio Operations
Warner Bros Discovery has decided to separate its declining cable TV business from its streaming and studio operations, a move that could pave the way for a sale or spinoff of its TV business. The company’s shares jumped 13% as it announced that the new structure would be more “deal-friendly” and expected to be completed by mid-2025.
The move comes as millions of consumers continue to cut the cord and shift to streaming services, contributing to a decline in cable TV revenue. Last month, Comcast announced plans to split most of its NBCUniversal cable networks into a new public company, while Paramount Global agreed to merge with streaming upstart Skydance Media.
Bank of America research analyst Jessica Reif Ehrlich believes that Warner Bros Discovery’s cable TV assets could be a “very logical partner” for Comcast’s new spin-off company, generating significant synergies.
Under the new structure, Warner Bros Discovery’s broadcast networks, including TNT, Animal Planet, and CNN, will be housed in a unit called “Global Linear Networks”. Streaming platforms Max and Discovery+ will be combined with film studios, including Warner Bros Pictures and New Line Cinema.
The move could lead to a sale or spinoff of the cable TV business, which has been written down by over $9 billion due to uncertainty around fees from cable and satellite distributors and sports rights renewals. However, finding a buyer could be challenging, as the networks are in debt and show no signs of growth.
Warner Bros Discovery CEO David Zaslav expects the deal-making environment to improve under the incoming administration, and the company has already reached a multi-year deal with Comcast, which could serve as a template for future negotiations with distributors.
