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

Shares dive 13% after reorganizing statement

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

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Challenges seen in offering debt-laden linear TV networks

(New throughout, adds details, background, comments from industry experts 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 declining cable television businesses such as CNN from streaming and studio operations such as Max, laying the foundation for a prospective sale or spinoff of its TV organization as more cable television customers cut the cable.

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 companies are considering options for fading cable organizations, a longtime cash cow where revenues are wearing down as millions of streaming video.

Comcast last month revealed strategies to divide the majority of its NBCUniversal cable networks into a new public company. The brand-new company would be well capitalized and placed to obtain other cable television networks if the industry consolidates, one source told Reuters.

Bank of America research study expert Jessica Reif Ehrlich composed that Warner Bros Discovery's cable tv assets are a "extremely sensible partner" for Comcast's new spin-off business.

"We highly think there is capacity for fairly sizable synergies if WBD's linear networks were integrated with Comcast SpinCo," composed Ehrlich, using the industry term for standard tv.

"Further, we think WBD's standalone streaming and studio possessions would be an appealing takeover target."

Under the brand-new structure for Warner Bros Discovery, the cable business including 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 division together with movie studios, consisting of Warner Bros Pictures and New Line Cinema.

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

"Streaming won as a behavior," stated Jonathan Miller, president of digital media financial investment business Integrated Media. "Now, it's winning as an organization."

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's brand-new business structure will differentiate growing studio and streaming properties from profitable but diminishing cable service, giving a clearer financial investment picture and most likely setting the stage for a sale or spin-off of the cable television unit.

The media veteran and consultant anticipated Paramount and others may take a comparable course.

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

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

Zaslav signaled that situation 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 industry consolidation.

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

Others injected a note of care, noting Warner Bros Discovery carries $40.4 billion in financial obligation.

"The structure change would make it simpler for WBD to sell its direct TV networks," eMarketer analyst Ross Benes said, referring to the cable TV business. "However, finding a purchaser will be challenging. The networks owe money and have no indications of growth."

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

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

Warner Bros Discovery is sports betting the Comcast agreement, together with an offer reached this year with cable television and broadband supplier Charter, will be a template for future negotiations with distributors. That might assist stabilize 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)