• by Wayne Friedman , Yesterday

Following similar moves by other companies, Warner Bros. Discovery will split into two companies, as expected -- spinning off its cable TV networks/digital platforms -- including CNN, TNT, TBS, Discovery, Discovery+ and Bleacher Report -- into a new company, called WBD Global Networks.

The remaining WBD company will consist of Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO and streaming service HBO Max, as well as its film and television libraries.

The announcement drove WBD stock up 8% in early morning trading to $10.64.

David Zaslav, president and CEO of Warner Bros. Discovery, will be president and CEO of WBD Streaming & Studios.

Gunnar Wiedenfels, chief financial officer of Warner Bros. Discovery, will be president and CEO of WBD Global Networks.

Wiedenfels said in a press release that the deal will allow each company to “pursue important investment opportunities and drive shareholder value” and “to create value for both linear and streaming viewers globally.”

For months, WBD has been signaling the split of the company. Comcast Corp. announced a similar move to spin off its cable TV networks, to be called Versant, in November 2024.

Brian Weiser, media analyst at Madison and Wall, said the news is not "directly significant" with regard to WBD's TV and streaming advertising efforts.

“Advertising will be proportionately more important to the new WBD Global Networks, and so it’s likely that advertising will receive relatively more focus than was the case with WBD... [however] the transaction won’t do anything to change the weak strategic dynamics of both businesses.”

In the first quarter, WBD’s global advertising revenues were down 8% to $1.98 billion, with domestic revenues down 11%, primarily due to a 27% decline in viewers.

One bright spot, Weiser says: “News-related services such as CNN likely have more meaningful ongoing opportunities for subscription and other revenue streams going forward so long as the entity owning that business chooses to continue investing in the business.”

Analysts say WBD’s debt load of $38 billion continues to hamstring the company in terms of growth going forward.

This story has been updated.