Shares jump 13% after reorganizing statement

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

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Challenges seen in offering debt-laden direct TV networks

(New throughout, adds details, background, comments from industry experts 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 declining cable television businesses such as CNN from streaming and studio operations such as Max, preparing for a possible sale or spinoff of its TV business as more cable television subscribers cut the cord.

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

Media business are thinking about alternatives for fading cable television TV businesses, a longtime cash cow where incomes are eroding as millions of customers welcome streaming video.

Comcast last month revealed plans to divide most of its NBCUniversal cable television networks into a new public company. The new company would be well capitalized and positioned to acquire other cable television networks if the market combines, one source informed Reuters.

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

"We highly believe there is potential for relatively large 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 possessions would be an appealing takeover target."

Under the new structure for Warner Bros Discovery, the cable TV 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 along with movie 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 lastly settling.

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

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's brand-new corporate structure will separate growing studio and streaming assets from lucrative however diminishing cable television company, providing a clearer investment image and likely setting the phase for a sale or spin-off of the cable television system.

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

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

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

Zaslav indicated that circumstance throughout Warner Bros Discovery's financier call last month. He stated he prepared for President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to media industry combination.

Zaslav had participated in merger talks with Paramount late last year, though a deal never ever emerged, according to a regulative filing last month.

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

"The structure modification would make it simpler for WBD to sell its linear TV networks," eMarketer expert Ross Benes said, describing the cable television TV business. "However, finding a purchaser will be tough. The networks owe money and have no indications of growth."

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

Today, the media company revealed a multi-year offer increasing the general costs Comcast will pay to disperse 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 provider Charter, will be a design template for future settlements with distributors. That could 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)