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Shares jump 13% after reorganizing announcement
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Follows path taken by Comcast's new spin-off business
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Challenges seen in selling debt-laden direct TV networks
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(New throughout, adds details, background, remarks from industry experts 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 decreasing cable television TV organizations such as CNN from streaming and studio operations such as Max, preparing for a possible sale or spinoff of its TV service as more cable television subscribers cut the cord.

Shares of Warner leapt after the business said the 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 companies are considering alternatives for fading cable television services, a long time golden goose where revenues are deteriorating as millions of customers welcome streaming video.

Comcast last month unveiled plans to divide most of its NBCUniversal cable networks into a brand-new public business. The new business would be well capitalized and placed to obtain other cable networks if the market combines, one source informed Reuters.
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Bank of America research study analyst Jessica Reif Ehrlich composed that Warner Bros Discovery's cable television service properties are a "very logical partner" for Comcast's new spin-off company.

"We strongly believe there is potential for fairly large synergies if WBD's direct networks were combined with Comcast SpinCo," wrote Ehrlich, utilizing the industry term for traditional television.

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

Under the new structure for Warner Bros Discovery, the cable television organization 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 in addition to movie studios, including Warner Bros Pictures and New Line Cinema.

The restructuring reflects an inflection point for the media market, as 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 financial investment company Integrated Media. "Now, it's winning as a company."

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's brand-new business structure will separate growing studio and streaming assets from rewarding however shrinking cable TV company, providing a clearer financial investment picture and likely setting the phase for a sale or spin-off of the cable television unit.

The media veteran and advisor forecasted Paramount and others might take a similar course.

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

"The question is not whether more pieces will be walked around or knocked off the board, or if further consolidation will occur-- it is a matter of who is the purchaser and who is the seller," composed Fishman.

Zaslav signified that scenario during Warner Bros Discovery's financier call last month. He said he expected President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to combination.

Zaslav had taken part in merger talks with Paramount late last year, though a deal never materialized, according to a regulative filing last month.

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

"The structure change would make it much easier for WBD to offer off its linear TV networks," eMarketer analyst Ross Benes said, referring to the cable service. "However, discovering a purchaser will be challenging. The networks owe money and have no signs of development."

In August, Warner Bros Discovery made a note of the worth of its TV properties by over $9 billion due to unpredictability around charges 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 total 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 and broadband service provider Charter, will be a template for future settlements with distributors. That might help stabilize prices 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)