Shares dive 13% after restructuring statement

Follows course taken by Comcast's brand-new spin-off business

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Challenges seen in selling debt-laden direct TV networks

(New throughout, adds details, background, remarks from industry insiders 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 organizations such as CNN from streaming and studio operations such as Max, preparing for a potential sale or spinoff of its TV business as more cable customers cut the cord.

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

Media business are thinking about choices for fading cable television organizations, a longtime cash cow where profits are deteriorating as millions of consumers embrace streaming video.

Comcast last month unveiled plans to divide the majority of its NBCUniversal cable television networks into a brand-new public business. The brand-new business would be well capitalized and placed to get other cable television networks if the industry consolidates, 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 new spin-off business.

"We strongly think there is potential for relatively substantial synergies if WBD's direct networks were integrated with Comcast SpinCo," wrote Ehrlich, using the industry term for standard television.

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

Under the new structure for Warner Bros Discovery, the cable television business 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 division along with film studios, consisting of Warner Bros Pictures and New Line Cinema.

The restructuring shows 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, chief executive of digital media investment business Integrated Media. "Now, it's winning as a company."

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's brand-new corporate structure will differentiate growing studio and streaming assets from successful however diminishing cable television TV business, offering a clearer investment photo and most likely setting the phase for a sale or spin-off of the cable unit.

The media veteran and adviser anticipated Paramount and others might take a comparable path.

CEO David Zaslav, a veteran deal-maker who led Discovery through its acquisition of Scripps Networks Interactive before acquiring the even bigger target, AT&T's WarnerMedia, is positioning the business for its next chess relocation, composed MoffettNathanson expert Robert Fishman.

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

Zaslav signaled that circumstance throughout Warner Bros Discovery's investor call last month. He said he expected President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to media market debt consolidation.

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

Others injected a note of caution, keeping in mind Warner Bros Discovery brings $40.4 billion in debt.

"The structure change would make it simpler for WBD to sell off its linear TV networks," eMarketer analyst Ross Benes stated, referring to the cable television business. "However, finding a buyer will be challenging. The networks owe money and have no indications of development."

In August, Warner Bros Discovery composed down the worth of its TV possessions by over $9 billion due to unpredictability around costs from cable and satellite distributors and sports betting rights renewals.

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

Warner Bros Discovery is wagering the Comcast arrangement, together with an offer reached this year with cable television and broadband supplier Charter, will be a design template for future negotiations with suppliers. That might 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)