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 direct TV networks

(New throughout, adds information, background, remarks from market experts and analysts, updates share costs)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

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

Shares of Warner leapt after the business 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 business are thinking about options for fading cable TV businesses, a longtime golden goose where incomes are deteriorating as countless consumers accept streaming video.

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

Bank of America research expert Jessica Reif Ehrlich wrote that Warner Bros Discovery's cable television service possessions are a "really rational partner" for Comcast's brand-new spin-off business.

"We strongly think there is potential for fairly sizable synergies if WBD's linear networks were integrated with Comcast SpinCo," composed Ehrlich, using the market term for conventional television.

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

Under the new structure for Warner Bros Discovery, the cable TV 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 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 lastly settling.

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

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's new corporate structure will differentiate growing studio and streaming possessions from successful however shrinking cable television business, giving a clearer financial investment picture and likely setting the stage for a sale or spin-off of the cable system.

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 move, wrote MoffettNathanson expert Robert Fishman.

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

Zaslav indicated 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, opening the door to media market consolidation.

Zaslav had actually engaged in merger talks with Paramount late in 2015, though a deal never ever 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 debt.

"The structure change would make it easier for WBD to offer off its direct TV networks," eMarketer analyst Ross Benes stated, referring to the cable television company. "However, finding a buyer will be difficult. The networks are in debt and have no signs of development."

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

This week, the media business announced a multi-year deal increasing the total charges 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 television and broadband supplier Charter, will be a design template for future settlements with distributors. That could 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)