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Shares jump 13% after restructuring announcement
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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, includes 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 chose to separate its declining cable companies such as CNN from streaming and studio operations such as Max, laying the groundwork for a possible sale or spinoff of its TV company as more cable customers cut the cable.

Shares of Warner jumped after the business stated the 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 companies are considering choices for fading cable organizations, a longtime golden goose where incomes are deteriorating as millions of customers accept streaming video.

Comcast last month unveiled plans to divide the majority of its NBCUniversal cable networks into a brand-new public company. The new company would be well capitalized and positioned to get other cable television networks if the industry combines, one source informed Reuters.

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

"We strongly believe there is capacity for relatively large synergies if WBD's direct networks were combined with Comcast SpinCo," wrote Ehrlich, utilizing the market term for conventional tv.

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

Under the new structure for Warner Bros Discovery, the cable television company consisting of 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 department together with film studios, including 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 finally settling.

"Streaming won as a habits," said Jonathan Miller, primary executive of digital media financial investment business Integrated Media. "Now, it's winning as an organization."

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's new corporate structure will distinguish growing studio and streaming assets from rewarding however diminishing cable television service, offering a clearer financial investment image and most likely setting the phase for a sale or spin-off of the cable system.

The media veteran and adviser forecasted Paramount and others might take a comparable path.

CEO David Zaslav, a veteran deal-maker who led Discovery through its of Scripps Networks Interactive before getting the even bigger target, AT&T's WarnerMedia, is placing the company 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 consolidation will happen-- it is a matter of who is the purchaser and who is the seller," composed Fishman.

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

Zaslav had actually taken part 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 care, keeping in mind Warner Bros Discovery carries $40.4 billion in financial obligation.

"The structure modification would make it easier for WBD to sell its linear TV networks," eMarketer analyst Ross Benes said, describing the cable business. "However, finding a buyer will be challenging. The networks are in financial obligation and have no signs of development."

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

Today, the media company revealed a multi-year deal increasing the general charges Comcast will pay to distribute Warner Bros Discovery's networks.

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