Shares jump 13% after restructuring announcement

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

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Challenges seen in selling debt-laden direct TV networks

(New throughout, includes details, background, comments from industry insiders and experts, updates share costs)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday chose to separate its decreasing cable television TV businesses such as CNN from streaming and studio operations such as Max, laying the groundwork for a prospective sale or spinoff of its TV organization as more cable customers cut the cord.

Shares of Warner leapt after the business 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 alternatives for fading cable television TV companies, a long time golden goose where incomes are wearing down as countless consumers accept streaming video.

Comcast last month revealed strategies to divide many of its NBCUniversal cable networks into a new public company. The brand-new business would be well capitalized and placed to obtain other cable television networks if the market combines, one source informed Reuters.

Bank of America research analyst Jessica Reif Ehrlich composed that Warner Bros Discovery's cable tv assets are a "extremely sensible partner" for Comcast's new spin-off company.

"We highly think there is capacity for relatively large synergies if WBD's linear networks were integrated with Comcast SpinCo," composed Ehrlich, using the market term for conventional tv.

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

Under the new structure for Warner Bros Discovery, the cable television 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 different department along with movie 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 finally settling.

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

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's brand-new corporate structure will differentiate growing studio and streaming possessions from lucrative however diminishing cable television 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 consultant forecasted Paramount and others may take a similar course.

CEO David Zaslav, a veteran deal-maker who led Discovery through its acquisition of Scripps Networks Interactive before acquiring the even larger target, AT&T's WarnerMedia, is placing the business for its next chess move, wrote MoffettNathanson expert 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 refers who is the purchaser and who is the seller," composed Fishman.

Zaslav indicated 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 market consolidation.

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

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

"The structure change would make it easier for WBD to sell its direct TV networks," eMarketer expert Ross Benes stated, describing the cable business. "However, discovering a purchaser will be difficult. The networks owe money and have no signs of development."

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

Today, the media company revealed a multi-year offer increasing the general fees Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is sports betting the Comcast arrangement, together with a deal reached this year with cable television and broadband service provider Charter, will be a template for future negotiations with distributors. That could 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)