Shares jump 13% after reorganizing statement

Follows path taken by Comcast's brand-new spin-off company

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Challenges seen in offering debt-laden linear TV networks

(New throughout, adds details, background, comments from market experts and analysts, updates share rates)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday decided to separate its decreasing cable television TV companies such as CNN from streaming and studio operations such as Max, preparing for a possible sale or spinoff of its TV service as more cable television customers cut the cord.

Shares of Warner leapt after the company said the brand-new structure would be more deal friendly and it anticipated to finish the split by the middle of 2025. Warner shares closed at $12.49, up more than 15%.

Media companies are thinking about options for fading cable services, a long time money cow where earnings are eroding as countless customers accept streaming video.

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

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

"We strongly believe there is potential for relatively large synergies if WBD's linear networks were combined with Comcast SpinCo," wrote Ehrlich, utilizing the industry term for conventional television.

"Further, our company believe WBD's standalone streaming and studio possessions would be an attractive takeover target."

Under the brand-new structure for Warner Bros Discovery, the cable television business consisting of 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 together 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 lastly paying off.

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

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's new corporate structure will distinguish growing studio and streaming properties from profitable however diminishing cable television business, giving a clearer investment photo and likely setting the phase for a sale or spin-off of the cable television unit.

The media veteran and advisor forecasted Paramount and others might take a comparable 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, composed MoffettNathanson expert Robert Fishman.

"The concern is not whether more pieces will be moved or knocked off the board, or if more debt consolidation will occur-- it refers who is the purchaser and who is the seller," composed Fishman.

Zaslav signaled that situation during Warner Bros Discovery's financier call last month. He said he anticipated President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to media industry debt consolidation.

Zaslav had actually engaged in merger talks with Paramount late in 2015, though a deal 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 change would make it simpler for WBD to sell its linear TV networks," eMarketer expert Ross Benes said, referring to the cable television business. "However, discovering a purchaser will be difficult. The networks are in financial obligation and have no signs of development."

In August, Warner Bros Discovery made a note of the value of its TV possessions by over $9 billion due to unpredictability around fees from cable and satellite suppliers and sports betting rights renewals.

This week, the media business announced a multi-year deal increasing the general costs Comcast will pay to distribute Warner Bros Discovery's networks.

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