Shares dive 13% after reorganizing statement

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

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Challenges seen in selling debt-laden linear TV networks

(New throughout, adds details, background, comments from industry experts and analysts, updates share prices)

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 companies such as CNN from streaming and studio operations such as Max, laying the foundation for a possible sale or spinoff of its TV service as more cable television customers cut the cord.

Shares of Warner jumped after the company stated 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 business are thinking about options for fading cable services, a longtime golden goose where earnings are eroding as countless customers accept streaming video.

Comcast last month unveiled strategies to split most of its NBCUniversal cable television networks into a brand-new public company. The new business would be well capitalized and positioned to obtain other cable networks if the market consolidates, one source told Reuters.

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

"We strongly believe there is potential for fairly substantial synergies if WBD's direct networks were combined with Comcast SpinCo," composed Ehrlich, utilizing the industry term for standard tv.

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

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

The restructuring reflects an inflection point for the media industry, as investments in streaming services such as Warner Bros Discovery's Max are lastly settling.

"Streaming won as a habits," said Jonathan Miller, primary executive of digital media investment firm Integrated Media. "Now, it's winning as an organization."

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

The media veteran and advisor forecasted Paramount and others may take a comparable path.

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

"The question is not whether more pieces will be moved around or knocked off the board, or if further combination will take place-- it refers 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 stated he expected President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media industry debt consolidation.

Zaslav had actually 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 caution, keeping in mind Warner Bros Discovery brings $40.4 billion in financial obligation.

"The structure modification would make it easier for WBD to sell its direct TV networks," eMarketer analyst Ross Benes said, describing the cable TV company. "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 value of its TV possessions by over $9 billion due to uncertainty around fees from cable and satellite suppliers and sports betting rights renewals.

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

Warner Bros Discovery is wagering the Comcast agreement, together with a deal reached this year with cable television and broadband company Charter, will be a template for future settlements with distributors. That might help support 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)