GitLab

bet9ja.com
Shares jump 13% after reorganizing statement

Follows course taken by Comcast's brand-new spin-off company

*

Challenges seen in offering debt-laden linear TV networks

(New throughout, includes details, background, remarks from market experts and analysts, updates share prices)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday decided to separate its declining cable businesses such as CNN from streaming and studio operations such as Max, laying the foundation for a potential sale or spinoff of its TV organization as more cable television subscribers cut the cable.

Shares of Warner jumped after the company said the new structure would be more deal friendly and it expected 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 golden goose where profits are deteriorating as countless consumers welcome streaming video.

Comcast last month unveiled strategies to split most of its NBCUniversal cable television networks into a new public business. The new business would be well capitalized and positioned to get other cable networks if the industry combines, one source told Reuters.

Bank of America research study analyst Jessica Reif Ehrlich wrote that Warner Bros Discovery's cable television service assets are a "extremely sensible partner" for Comcast's brand-new spin-off company.

"We strongly think there is potential for fairly large synergies if WBD's linear networks were combined with Comcast SpinCo," wrote Ehrlich, utilizing the industry term for conventional tv.

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

Under the new structure for Discovery, the cable organization including TNT, Animal Planet and CNN will be housed in an unit called Global Linear Networks.

Streaming platforms Max and Discovery+ will be under a different division along with film studios, consisting of Warner Bros Pictures and New Line Cinema.

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

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

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's brand-new corporate structure will distinguish growing studio and streaming possessions from profitable however diminishing cable television TV organization, giving a clearer financial investment photo and most likely setting the phase for a sale or spin-off of the cable television unit.

The media veteran and adviser forecasted Paramount and others may take a similar course.

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

"The concern is not whether more pieces will be moved or knocked off the board, or if more combination will take place-- it is a matter of who is the buyer and who is the seller," wrote Fishman.

Zaslav signified that situation throughout Warner Bros Discovery's financier call last month. He said he anticipated President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media industry combination.

Zaslav had actually taken part in merger talks with Paramount late in 2015, though an offer never emerged, according to a regulatory filing last month.

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

"The structure change would make it easier for WBD to sell its linear TV networks," eMarketer expert Ross Benes said, describing the cable company. "However, discovering a purchaser will be challenging. The networks owe money and have no indications of growth."

In August, Warner Bros Discovery documented the value of its TV properties by over $9 billion due to uncertainty around charges from cable and satellite distributors and sports betting rights renewals.
bet9ja.com
Today, the media business revealed a multi-year deal increasing the total costs Comcast will pay to distribute Warner Bros Discovery's networks.

Warner Bros Discovery is wagering the Comcast contract, together with a deal reached this year with cable and broadband provider Charter, will be a template for future negotiations with distributors. That might help support prices 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)
bet9ja.com