Shares jump 13% after restructuring announcement

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

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Challenges seen in selling debt-laden direct TV networks

(New throughout, includes information, background, remarks from market insiders and experts, 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 businesses such as CNN from streaming and studio operations such as Max, laying the groundwork for a potential sale or spinoff of its TV service as more cable subscribers cut the cord.

Shares of Warner jumped after the business said the new structure would be more deal friendly and it expected to finish 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 businesses, a longtime golden goose where profits are wearing down as countless consumers welcome streaming video.

Comcast last month unveiled strategies to divide the majority of its NBCUniversal cable networks into a new public business. The new company would be well capitalized and positioned to get other cable television networks if the market consolidates, one source told Reuters.

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

"We highly think there is capacity for relatively large synergies if WBD's direct networks were integrated with Comcast SpinCo," wrote Ehrlich, utilizing the industry term for conventional tv.

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

Under the brand-new structure for Warner Bros Discovery, the cable television service including TNT, Animal Planet and CNN will be housed in an unit called Global Linear Networks.

Streaming platforms Max and Discovery+ will be under a separate department along with film studios, including Warner Bros Pictures and New Line Cinema.

The restructuring shows an inflection point for the media industry, as financial investments in streaming services such as Warner Bros Discovery's Max are finally settling.

"Streaming won as a habits," stated Jonathan Miller, chief executive of digital media investment firm Integrated Media. "Now, it's winning as an organization."

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's brand-new business structure will separate growing studio and streaming possessions from successful however diminishing cable TV organization, offering a clearer investment picture and likely setting the stage for a sale or spin-off of the cable unit.

The media veteran and advisor predicted Paramount and others might take a similar path.

CEO David Zaslav, a veteran deal-maker who led Discovery through its acquisition of Scripps Networks Interactive before getting the even bigger target, AT&T's WarnerMedia, is placing the business for its next chess relocation, composed MoffettNathanson expert Robert Fishman.

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

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

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

Others injected a note of caution, noting Warner Bros Discovery brings $40.4 billion in debt.

"The structure modification would make it much easier for WBD to sell its linear TV networks," eMarketer analyst Ross Benes stated, referring to the cable television business. "However, discovering a purchaser will be challenging. The networks owe money and have no signs of development."

In August, Warner Bros Discovery jotted down the worth of its TV properties by over $9 billion due to unpredictability around charges from cable television and satellite suppliers and sports betting rights renewals.

Today, the media business announced a multi-year offer increasing the general fees Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is sports betting the Comcast arrangement, together with an offer reached this year with cable and broadband company Charter, will be a template for future settlements with suppliers. That might help support prices 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)