Warner Bros. Discovery stated Thursday that it’s restructuring into two working divisions — with one specializing in its struggling legacy cable TV enterprise and the opposite on streaming and studios — in a rejigger that would set it up for “strategic opportunities” down the street.
The media big — in what insiders referred to as an indication of optimism that laws round mergers and acquisitions will likely be friendlier below the Trump administration — will merge the unit that features streaming companies Max and Discovery+ and HBO with a division that features film and TV studio Warner Bros.
The streaming and studios unit will sit alongside the corporate’s legacy cable unit, which incorporates networks resembling CNN, TNT, TBS, Meals Community and HGTV.
The transfer comes because the New York-based conglomerate tries to steer Wall Avenue that it’s set as much as compete with leisure giants like Disney, Netflix, Apple and Amazon.
In an announcement, Warner Bros. Discovery Chief Government Officer David Zaslav stated the brand new construction “better aligns our organization and enhances our flexibility with potential future strategic opportunities across an evolving media landscape.”
At the moment, Warner Bros. Discovery has three segments—networks, studios and direct-to-consumer streaming. The CEO stated he expects the brand new construction to be arrange by the center of 2025.
Media corporations with cable TV companies, that are not progress engines, are mulling methods to finest handle the divisions whereas nonetheless rising.
Final month, Comcast stated it would spin off a trove of its cable networks, together with MSNBC and CNBC, right into a standalone firm subsequent yr.
Whereas the identical technique has been mentioned at Warner Bros. Discovery, it might be an even bigger problem for the corporate to soak up the monetary blow of dropping cable earnings, The Wall Avenue Journal reported.
What’s extra, Comcast is a bigger and extra various enterprise with theme parks and broadband companies, permitting it to raised deal with such a transfer.
Warner Bros. Discovery stated it “expects to continue to evolve the Board to execute its strategy and drive future shareholder value creation.”
Warner Bros Discovery’s streaming enterprise is on the middle of its progress technique. The corporate presently has about 110 million subscribers globally for its streaming companies.
In the meantime, the corporate’s cable TV unit has struggled as shoppers proceed to chop their cable plans in favor of streaming and advertisers shift extra of their spending to digital platforms. Earlier this yr, Warner took a $9.1 billion write-down on the worth of its cable networks.
Regardless of these challenges, the cable community unit remains to be the biggest income generator for the agency.
By way of the primary 9 months of this yr, the cable unit posted $15.4 billion in income, down 3% from the identical interval a yr in the past.
Since 2022 when Warner Media merged with Discovery to type the media big, insiders have speculated that the corporate would ultimately be an acquisition goal or merge with one other agency.
Zaslav explored combining with Paramount World earlier this yr, however Paramount finally determined to merge with Skydance Media as a substitute in a deal that’s anticipated to shut within the first half of 2025.
