Shares dive 13% after reorganizing statement

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

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Challenges seen in offering debt-laden linear TV networks

(New throughout, includes details, background, comments from market insiders and experts, updates share prices)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday chose to separate its declining cable television businesses 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 customers cut the cord.

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

Media companies are thinking about options for fading cable television TV services, a longtime money cow where profits are wearing down as countless customers embrace streaming video.

Comcast last month revealed plans to divide most of its NBCUniversal cable television networks into a brand-new public company. The brand-new business would be well capitalized and placed to get other cable networks if the market consolidates, one source informed Reuters.

Bank of America research analyst Jessica Reif Ehrlich wrote that Warner Bros Discovery's cable assets are a "extremely logical partner" for Comcast's new spin-off business.

"We highly think there is capacity for fairly sizable synergies if WBD's linear networks were combined with Comcast SpinCo," wrote Ehrlich, using the industry term for standard tv.

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

Under the brand-new structure for Warner Bros Discovery, the cable TV service 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 film studios, consisting of Warner Bros Pictures and New Line Cinema.

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

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

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's new business structure will differentiate growing studio and streaming assets from lucrative however shrinking cable television TV organization, giving a clearer financial investment image and most likely setting the stage for a sale or spin-off of the cable television unit.

The media veteran and adviser predicted 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 getting the even bigger target, AT&T's WarnerMedia, is placing the company for its next chess relocation, wrote MoffettNathanson expert Robert Fishman.

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

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

Zaslav had participated in merger talks with Paramount late last year, though a deal never ever materialized, according to a regulatory 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 simpler for WBD to offer off its linear TV networks," eMarketer expert Ross Benes stated, referring to the cable company. "However, finding a purchaser will be challenging. The networks owe money and have no signs of growth."

In August, Warner Bros Discovery composed down 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 business revealed a multi-year deal increasing the overall costs Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is wagering the Comcast arrangement, together with an offer reached this year with cable and broadband service provider Charter, will be a design template for future settlements with distributors. That could assist support pricing 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)