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Shares dive 13% after reorganizing statement
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Follows course taken by Comcast's brand-new spin-off business
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Challenges seen in offering debt-laden direct TV networks

(New throughout, adds information, background, remarks from industry insiders and analysts, updates share rates)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

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

Shares of Warner jumped after the company 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 options for fading cable television TV organizations, a long time golden goose where earnings are wearing down as millions of customers embrace streaming video.

Comcast last month unveiled plans to divide many of its NBCUniversal cable television networks into a new public company. The brand-new company would be well capitalized and positioned to get other cable television networks if the industry consolidates, one source told Reuters.

Bank of America research analyst Jessica Reif Ehrlich composed that Warner Bros Discovery's cable television service properties are a "extremely rational partner" for Comcast's brand-new spin-off business.

"We highly think there is potential for fairly sizable synergies if WBD's linear networks were combined with Comcast SpinCo," wrote Ehrlich, utilizing the industry term for standard television.

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

Under the brand-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 different department in addition to film studios, consisting of Warner Bros Pictures and New Line Cinema.

The restructuring shows 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 habits," stated Jonathan Miller, chief executive of digital media financial investment business Integrated Media. "Now, it's winning as a business."

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's new business structure will separate growing studio and streaming properties from successful however shrinking cable television company, providing a clearer financial investment photo and likely setting the stage for a sale or spin-off of the cable television system.

The media veteran and consultant predicted 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 getting the even bigger target, AT&T's WarnerMedia, is placing the business for its next chess relocation, composed MoffettNathanson analyst Robert Fishman.

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

Zaslav indicated that scenario during 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 participated in merger talks with Paramount late in 2015, though an offer never ever emerged, according to a regulatory filing last month.

Others injected a note of caution, noting Warner Bros Discovery carries $40.4 billion in debt.

"The structure modification would make it simpler for WBD to sell off its linear TV networks," eMarketer expert Ross Benes stated, referring to the cable television company. "However, discovering a purchaser will be challenging. The networks are in financial obligation and have no signs of development."

In August, Warner Bros Discovery documented the worth of its TV assets by over $9 billion due to uncertainty around costs from cable and satellite suppliers and sports betting rights renewals.
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Today, the media company revealed a multi-year offer increasing the total charges Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is sports betting the Comcast agreement, together with a deal reached this year with cable and broadband supplier Charter, will be a design template for future negotiations with distributors. That could help stabilize prices for the domestic pay TV market. (Reporting by Deborah Sophia and Aditya Soni in Bengaluru, Dawn Chmielewski in Los Angeles; by Shilpi Majumdar, Arun Koyyur, Keith Weir and David Gregorio)