Shares dive 13% after reorganizing statement

Follows path 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 information, background, comments 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 decided 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 organization as more cable subscribers cut the cable.

Shares of Warner jumped after the business 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 considering options for fading cable television organizations, a long time golden goose where earnings are deteriorating as countless consumers accept streaming video.

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

Bank of America research study expert Jessica Reif Ehrlich composed that Warner Bros Discovery's cable tv properties are a "very rational partner" for Comcast's new spin-off company.

"We highly believe there is potential for fairly substantial synergies if WBD's direct networks were integrated with Comcast SpinCo," composed Ehrlich, using 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 brand-new structure for Warner Bros Discovery, the cable service 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 separate department along with movie studios, consisting of Warner Bros Pictures and New Line Cinema.

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

"Streaming won as a habits," said Jonathan Miller, president of digital media investment firm Integrated Media. "Now, it's winning as a service."

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's brand-new business structure will distinguish growing studio and streaming possessions from profitable but diminishing cable television business, providing a clearer financial investment image and likely setting the phase for a sale or spin-off of the cable unit.

The media veteran and consultant forecasted Paramount and others may take a similar 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 company for its next chess move, wrote MoffettNathanson analyst Robert Fishman.

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

Zaslav signified that scenario throughout Warner Bros Discovery's financier call last month. He stated he anticipated President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to media market consolidation.

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

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

"The structure modification would make it simpler for WBD to offer off its direct TV networks," eMarketer expert Ross Benes said, referring to the cable service. "However, finding a purchaser will be tough. The networks owe money and have no indications of growth."

In August, Warner Bros Discovery made a note of the value of its TV assets by over $9 billion due to uncertainty around costs from cable television and satellite distributors and sports betting rights renewals.

This week, the media business revealed a multi-year deal increasing the overall charges Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is sports betting the Comcast agreement, together with a deal reached this year with cable and broadband supplier Charter, will be a template for future settlements with suppliers. That could help support rates 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)