Warner Bros. Discovery Inc. is dividing into two publicly-traded companies by the middle of 2025. This move will allow the company to adapt to changing viewer tastes and financial pressures in the streaming age.
It was announced on Monday that the company would separate its studio and streaming operations from traditional TV network assets.
Warner Bros. Motion Picture Group will be included in the new studios and streaming business, along with Warner Bros. Television and DC Studios. HBO and HBO Max are also part of this venture.
David Zaslav, CEO of this company will continue in his role.
Gunnar Weidenfels, the Chief Financial Officer, will be in charge of Global Networks, a newly-formed company that will manage linear TV assets, including CNN, TNT and TBS as well as other entertainment and sport networks.
This restructuring comes after years of instability for US media companies, which have seen their legacy TV models struggle with declining viewing and revenue while streaming platforms battle rising content costs, and fierce competition from Netflix and Disney.
Many analysts have suggested for years that a consolidation or reorganization is necessary to ease the financial burden many companies are facing since the end of the pandemic.
Warner Bros. shares are up by more than 10% in pre-market trading on Monday. Discovery Inc.’s share price rose by over 10% on Monday morning in the pre-market.
Warner Bros. announced plans to split in order to facilitate this process. Discovery announced that it would also raise $17.5 billion in bridge loans, which they expect to recapitalize prior to the completion of restructuring.
Global Networks will keep up to a 20 percent stake in Streaming and Studios, which they plan to monetize as a way to pay off debt.
The echo of peers in the industry
Comcast Corp. made a similar move when it reorganized NBCUniversal, segmenting cable networks into a unit called Versant while maintaining streaming and studios in a separate entity.
These structural changes are seen by media executives as essential to improving focus and capital allocator despite divergent trajectories between linear TV and digital platform.
Warner Bros. Discovery Inc. was formed in 2022 by the merger between AT&T WarnerMedia and Discovery Inc. It has been struggling with heavy debt and a deteriorating cable business.
The company’s shares rose by 1.8% on Friday to $9.82, but they are still down 7.1% for the year.
As new information becomes available, this post Warner Bros Discovery splits in two to streamline its operations might be updated.
