Warner Bros Discovery Sets Stage For Potential Cable Deal By > 자유게시판

Shares jump 13% after restructuring announcement

Follows course taken by Comcast's new spin-off business

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Challenges seen in offering debt-laden linear TV networks

(New throughout, adds details, background, remarks from industry insiders and analysts, updates share costs)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

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

Shares of Warner jumped after the business stated the 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 business are considering options for fading cable TV companies, a longtime money cow where earnings are eroding as countless consumers accept streaming video.

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

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

"We strongly think there is potential for relatively substantial synergies if WBD's linear networks were combined with Comcast SpinCo," wrote Ehrlich, utilizing the market term for conventional 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 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 different division along with movie studios, including Warner Bros Pictures and New Line Cinema.

The restructuring reflects an inflection point for the media industry, as investments in streaming services such as Discovery's Max are finally paying off.

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

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's new corporate structure will distinguish growing studio and streaming properties from profitable but diminishing cable TV service, offering a clearer investment image and most likely setting the phase for a sale or spin-off of the cable television system.

The media veteran and adviser anticipated 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 positioning the business for its next chess relocation, wrote MoffettNathanson expert Robert Fishman.

"The question is not whether more pieces will be moved around or knocked off the board, or if further combination will happen-- it is a matter of who is the purchaser and who is the seller," wrote Fishman.

Zaslav indicated that circumstance during Warner Bros Discovery's investor call last month. He stated he expected President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media industry consolidation.

Zaslav had actually engaged 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 carries $40.4 billion in debt.

"The structure modification would make it easier for WBD to offer off its direct TV networks," eMarketer analyst Ross Benes stated, referring to the cable organization. "However, discovering a buyer will be challenging. The networks are in debt and have no signs of growth."

In August, Warner Bros Discovery composed down the worth of its TV possessions by over $9 billion due to uncertainty around charges from cable and satellite distributors and sports betting rights renewals.

Today, the media company revealed a multi-year offer increasing the total charges 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 company Charter, will be a template for future settlements with distributors. That might 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)