Warner Bros Discovery Sets Stage For Potential Cable Deal By > 자유게시판

Shares jump 13% after reorganizing statement

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

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Challenges seen in offering debt-laden direct TV networks

(New throughout, adds details, background, remarks from market experts and experts, updates share rates)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

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

Shares of Warner jumped after the company said the brand-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 considering choices for fading cable businesses, a longtime golden goose where incomes are deteriorating as millions of customers welcome streaming video.

Comcast last month revealed strategies to split many of its NBCUniversal cable television networks into a new public business. The new company would be well capitalized and positioned to obtain other cable television networks if the market consolidates, one source informed Reuters.

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

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

Under the brand-new structure for Discovery, the cable organization 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 separate division in addition to movie studios, consisting of Warner Bros Pictures and New Line Cinema.

The restructuring reflects an inflection point for the media market, as financial 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 financial investment business Integrated Media. "Now, it's winning as an organization."

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's brand-new business structure will differentiate growing studio and streaming assets from profitable however diminishing cable company, giving a clearer investment photo and most likely setting the stage for a sale or spin-off of the cable television system.

The media veteran and consultant forecasted Paramount and others might take a similar course.

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

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

Zaslav signaled that situation during Warner Bros Discovery's investor call last month. He stated he expected President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media industry debt consolidation.

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

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

"The structure change would make it easier for WBD to sell its linear TV networks," eMarketer expert Ross Benes stated, describing the cable television organization. "However, finding a purchaser will be challenging. The networks are in debt and have no indications of growth."

In August, Warner Bros Discovery composed down the worth of its TV assets by over $9 billion due to unpredictability around charges from cable and satellite suppliers and sports betting rights renewals.

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

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

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