Warner Bros. Discovery Inc. will divide into two publicly traded companies by mid-2025, a sweeping move aimed at adapting to shifting viewer preferences and the financial pressures of the streaming era.
The company will separate its streaming and studio operations from its traditional television network assets, it announced Monday.
The new streaming and studios business will include Warner Bros. Motion Picture Group, Warner Bros. Television, DC Studios, HBO, HBO Max, and the company’s extensive film and TV library.
CEO David Zaslav will continue to lead this entity.
Meanwhile, Chief Financial Officer Gunnar Wiedenfels will take charge of a newly formed Global Networks company, which will oversee linear television assets including CNN, TNT, TBS, and other entertainment and sports networks.
The restructuring follows years of volatility for US media conglomerates, as legacy television models confront declining viewership and advertising revenue, while streaming platforms wrestle with ballooning content costs and intense competition from players like Netflix and Disney.
Analysts have long suggested that some form of consolidation or reorganization would be necessary to stem the financial strain many companies have faced since the pandemic’s end.
Share price of Warner Bros. Discovery Inc was rising by more than 10% in pre-market trading on Monday on the back of the news.
To facilitate the split, Warner Bros. Discovery also announced plans to raise a $17.5 billion bridge loan, which it expects to recapitalize before the restructuring is complete.
The Global Networks division will retain up to a 20% stake in the Streaming and Studios entity, which it plans to monetize to help pay down debt.
Echoes of industry peers
The company’s move mirrors a similar decision by Comcast Corp., which recently reorganized NBCUniversal by segmenting its cable networks under a new unit called Versant, while keeping streaming and studios under a separate umbrella.
Media executives see such structural changes as necessary to improve focus and capital allocation amid diverging trajectories of linear TV and digital platforms.
Warner Bros. Discovery, which was created in 2022 through the merger of AT&T’s WarnerMedia and Discovery Inc., has struggled with a heavy debt load and an eroding cable television business.
Shares of the company rose 1.8% to $9.82 on Friday, though they remain down 7.1% so far this year.
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