Shares jump 13% after reorganizing statement

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

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Challenges seen in selling debt-laden direct TV networks

(New throughout, adds information, background, remarks from market experts and experts, 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 businesses such as CNN from streaming and studio operations such as Max, laying the foundation for a possible sale or spinoff of its TV service as more cable television customers cut the cable.

Shares of Warner jumped after the company said the 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 alternatives for fading cable services, a long time money cow where revenues are wearing down as countless customers embrace streaming video.

Comcast last month unveiled strategies to split the majority of its NBCUniversal cable television networks into a brand-new public company. The brand-new company would be well capitalized and placed to obtain other cable networks if the industry combines, one source told Reuters.

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

"We highly think there is potential for fairly substantial synergies if WBD's linear networks were integrated with Comcast SpinCo," wrote Ehrlich, utilizing the market term for conventional television.

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

Under the brand-new structure for Warner Bros Discovery, the cable company including TNT, Animal Planet and CNN will be housed in a system called Global Linear Networks.

Streaming platforms Max and Discovery+ will be under a separate division together with movie studios, consisting of Warner Bros Pictures and New Line Cinema.

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

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

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's brand-new business structure will differentiate growing studio and streaming properties from lucrative however diminishing cable television TV company, providing a clearer financial investment photo and most likely setting the phase for a sale or spin-off of the cable unit.

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

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

"The concern is not whether more pieces will be walked around or knocked off the board, or if further consolidation will happen-- it is a matter of who is the purchaser and who is the seller," composed Fishman.

Zaslav signified that circumstance during Warner Bros Discovery's financier call last month. He stated he prepared for President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media market debt consolidation.

Zaslav had actually engaged in merger talks with Paramount late in 2015, though a deal never emerged, according to a regulatory filing last month.

Others injected a note of care, noting Warner Bros Discovery carries $40.4 billion in financial obligation.

"The structure change would make it easier for WBD to sell its linear TV networks," eMarketer analyst Ross Benes stated, referring to the cable television business. "However, discovering a buyer will be tough. The networks owe money and have no signs of development."

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

This week, the media business announced a multi-year deal increasing the general charges Comcast will pay to disperse 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 company Charter, will be a design template for future negotiations with suppliers. That might assist stabilize 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)