Shares dive 13% after reorganizing statement

Follows path taken by Comcast's new spin-off business

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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 rates)

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 businesses such as CNN from streaming and studio operations such as Max, preparing for a prospective sale or spinoff of its TV service as more cable subscribers cut the cord.

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

Media business are considering options for fading cable television TV services, a long time cash cow where profits are wearing down as millions of customers accept streaming video.

Comcast last month revealed strategies to divide the majority of its NBCUniversal cable networks into a brand-new public business. The new business would be well capitalized and positioned to get other cable television networks if the market combines, one source told Reuters.

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

"We highly believe there is capacity for fairly substantial synergies if WBD's direct networks were integrated with Comcast SpinCo," wrote Ehrlich, utilizing the market term for standard tv.

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

Under the new structure for Warner Bros Discovery, the cable TV 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 different division in addition to movie studios, consisting of Warner Bros Pictures and New Line Cinema.

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

"Streaming won as a habits," stated Jonathan Miller, primary executive of digital media investment firm 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 possessions from lucrative but shrinking cable TV organization, giving a clearer investment picture and likely setting the stage for a sale or spin-off of the cable unit.

The media veteran and consultant forecasted Paramount and others may take a similar course.

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

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

Zaslav indicated that circumstance throughout Warner Bros Discovery's financier call last month. He said he anticipated President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to media industry combination.

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

Others injected a note of caution, noting Warner Bros Discovery carries $40.4 billion in debt.

"The structure modification would make it simpler for WBD to sell off its linear TV networks," eMarketer analyst Ross Benes stated, describing the cable television TV business. "However, finding a purchaser will be difficult. The networks owe money and have no signs of growth."

In August, Warner Bros Discovery made a note of the value of its TV properties by over $9 billion due to unpredictability around charges from cable television and satellite suppliers and sports betting rights renewals.

This week, the media business announced a multi-year deal increasing the general fees Comcast will pay to distribute Warner Bros Discovery's networks.

Warner Bros Discovery is wagering the Comcast contract, together with an offer reached this year with cable and broadband company Charter, will be a 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)