Shares dive 13% after reorganizing statement

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

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Challenges seen in selling debt-laden direct TV networks

(New throughout, includes details, background, remarks from industry experts and experts, updates share rates)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday decided to separate its declining cable television companies such as CNN from streaming and studio operations such as Max, laying the groundwork for a prospective sale or spinoff of its TV business as more cable television subscribers cut the cord.

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

Media companies are considering alternatives for fading cable businesses, a long time golden goose where earnings are wearing down as countless consumers accept streaming video.

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

Bank of America research study expert Jessica Reif Ehrlich composed that Warner Bros Discovery's cable television service properties are a "extremely rational partner" for Comcast's brand-new spin-off business.

"We highly believe there is capacity for relatively sizable synergies if WBD's linear networks were integrated with Comcast SpinCo," composed Ehrlich, utilizing the market term for conventional tv.

"Further, our company believe WBD's standalone streaming and studio properties would be an attractive takeover target."

Under the new structure for Warner Bros Discovery, the cable television business consisting of TNT, Animal Planet and CNN will be housed in an unit called Global Linear Networks.

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

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

"Streaming won as a habits," said Jonathan Miller, president of digital media investment firm Integrated Media. "Now, it's winning as a service."

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's new corporate structure will separate growing studio and streaming properties from profitable but shrinking cable television TV service, giving a clearer investment image and most likely setting the phase for a sale or spin-off of the cable television unit.

The media veteran and adviser predicted 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 getting the even bigger target, AT&T's WarnerMedia, is positioning the business for its next chess relocation, wrote MoffettNathanson expert Robert Fishman.

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

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

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

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

"The structure change would make it much easier for WBD to sell its direct TV networks," eMarketer expert Ross Benes stated, describing the cable company. "However, discovering a purchaser will be challenging. The networks are in financial obligation and have no indications of growth."

In August, Warner Bros Discovery composed down the value of its TV assets by over $9 billion due to uncertainty around costs from cable television and satellite suppliers and sports betting rights renewals.

Today, the media company revealed a multi-year deal increasing the total costs Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is wagering the Comcast agreement, together with a deal reached this year with cable television and broadband provider Charter, will be a template for future negotiations with suppliers. That could help 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)