• by Wayne Friedman , December 12, 2024

Possibly in preparation for a move similar to that of Comcast Corp., Warner Bros. Discovery recently announced a “new corporate structure” plan to separately segment its linear TV networks and streaming/studio businesses.

WBD's "Global Linear Networks’ division will house its cable TV networks -- including CNN, TBS, TNT, HGTV and the Food Network -- and all its news, sports, scripted and unscripted programming channels.

The ‘Streaming & Studios" unit will house Warner Bros. Discovery's film/TV production studios, and Max and Discovery+, its two streaming platforms.

One report suggests its high-profile premium cable TV network group, HBO, will be contained in the the Streaming & Studios unit.
These major changes will be consummated in mid-2025.

Shares of Warner Bros. Discovery were up roughly 14% to $12.35 in midday Thursday trading.

Analysts suspect the change could be an early move to sell off or consolidate businesses.

“While the move falls short of the full spinout of cable network assets Comcast recently initiated, it is nevertheless another move to highlight the optionality and flexibility of these two increasingly divergent businesses,” writes Robert Fishman, media analyst for MoffettNathanson Research.

In the short term, Fishman believes there will be little change to WBD’s core business. “The company will still rely on linear network cash flows to fund de-levering and continued D2C investment.”

In November, Comcast announced it will spin off virtually all its cable TV entertainment channels and news networks, MSNBC and CNBC, while keeping one lone cable entertainment network -- Bravo -- to form a new, as yet unnamed company.

Linear TV networks have been in decline due to cord-cutting by consumers who have transitioned to streaming platforms and virtual pay TV services.

J.P. Morgan, Evercore, and Guggenheim Securities are serving as financial advisors to WBD.