ISLAMABAD: Warner Bros Discovery (WBD) announced a major restructuring by splitting into two publicly traded companies.
The move separates its streaming and studio businesses from its declining cable television networks.
This strategic breakup aims to help the parent company of HBO and CNN better compete in the fast-evolving streaming market.
The split reverses the 2022 merger between WarnerMedia and Discovery, allowing the streaming and studios unit to scale without being burdened by the struggling cable networks.
Streaming and Studios Focused Growth
The new streaming-and-studios company will include Warner Bros, DC Studios, and HBO Max, which are considered WBD’s most valuable assets.
David Zaslav will continue as CEO of this unit, while CFO Gunnar Wiedenfels will head the networks company.
The networks division will hold brands like CNN, TNT Sports, and Bleacher Report and maintain up to a 20% stake in the streaming company.
The transaction is expected to be tax-free and finalized by mid-2026.
Market Reaction and Industry Implications
WBD’s stock rose 8% in early trading but remains down nearly 60% since the original merger, affected by subscriber losses and fierce competition.
The company carries a heavy debt load of $38 billion as of March, with most debt allocated to the networks unit after the split.
Analysts believe the separation will allow Warner Bros to attract more investor interest by focusing on core businesses.
Industry experts also suggest this breakup could trigger further media deals and consolidation, with cable networks possibly merging with other companies like Comcast.
Warner Bros Discovery secured a $17.5 billion bridge loan from J.P. Morgan to help restructure its debt.
The company’s focus now is on boosting its streaming service, HBO Max, which has 122 million subscribers and aims to surpass 150 million by the end of 2026.
