Warner Bros Discovery to separate studios and streaming in two-way split

NEW YORK – Warner Bros Discovery said on June 9 it would split into two companies, separating its studios and streaming business from its fading cable television networks as the parent of HBO and CNN looks to compete better in the streaming era..

The break-up is the latest sign of

the great unravelling

of decades of media consolidation that have created global conglomerates spanning content creation, distribution and, in some cases, telecommunications.

The strategic reset would provide Warner Bros Discovery’s streaming unit more room to scale by producing hit studio content without being bogged down by the declining cable networks business.

Its chief executive David Zaslav will lead the streaming and studios business after the break-up, while chief financial officer Gunnar Wiedenfels will head the Global Networks unit that includes the cable assets.

“By operating as two distinct and optimised companies in the future, we are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today’s evolving media landscape,” Mr Zaslav said.

The separation for the company formed out of a merger between WarnerMedia and Discovery in 2022 will be structured as a tax-free transaction and is expected to be completed by mid-2026.

Warner Bros Discovery laid the groundwork for a possible sale or spin-off of its declining cable TV assets in December by announcing a separation from its streaming and studio operations.

The split will align the company with Comcast, which is spinning off most of its cable TV networks such as MSNBC and CNBC.

Warner Bros Discovery also said on June 9 it launched tender offers to restructure its existing debt, funded by a US$17.5 billion (S$22.5 billion) bridge facility provided by JP Morgan.

The bridge loan is expected to be refinanced ahead of the planned separation, it said, adding that global networks will retain up to a 20 per cent stake in streaming and studios, which it plans to monetise to further reduce debt.

JP Morgan and Evercore are advising Warner Bros Discovery on the deal, while Kirkland & Ellis is serving as legal counsel. REUTERS