Warner Bros Discovery sets stage for potential cable deal by splitting operations

Warner Bros Discovery on Thursday decided to separate its declining cable TV business from the streaming and studio operations, laying the groundwork for a potential sale or spinoff of its TV business as cord-cutting picks up pace.

Its shares jumped 13% as the company said the new structure would be more deal friendly and that it expected to complete the split by the middle of 2025.

Media companies are considering options for their fading cable TV businesses as millions of consumers embrace streaming video, contributing to the decline in cable TV revenue, long the industry’s cash cow.

Comcast last month plans to split most of its NBCUniversal cable networks into a new public company, while Comedy Central owner Paramount Global had earlier this year agreed to merge with streaming-era upstart Skydance Media.

Bank of America research analyst Jessica Reif Ehrlich wrote that Warner Bros Discovery’s cable television assets are a “very logical partner” for Comcast’s new spin-off company, as the television business continues to generate a substantial amount of cash.

“We strongly believe there is potential for fairly sizable synergies if WBD’s linear networks were combined with Comcast SpinCo,” wrote Ehrlich, using the industry term for traditional television. Reuters