Shares dive 13% after reorganizing statement

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

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Challenges seen in selling debt-laden direct TV networks

(New throughout, includes information, background, comments from market insiders and experts, updates share rates)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

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

Shares of Warner leapt after the company said the brand-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 television companies, a longtime golden goose where profits are deteriorating as countless consumers accept streaming video.

Comcast last month unveiled strategies to split most of its NBCUniversal cable networks into a new public company. The brand-new business would be well capitalized and placed to get other cable networks if the industry combines, one source told Reuters.

Bank of America research expert Jessica Reif Ehrlich composed that Warner Bros Discovery's cable tv assets are a "really sensible partner" for Comcast's brand-new spin-off business.

"We strongly think there is potential for relatively large synergies if WBD's linear networks were combined with Comcast SpinCo," wrote Ehrlich, using the market term for traditional television.

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

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

Streaming platforms Max and Discovery+ will be under a different division in addition to movie studios, including 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 finally settling.

"Streaming won as a habits," said Jonathan Miller, primary executive of digital media investment company Integrated Media. "Now, it's winning as a business."

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's brand-new corporate structure will separate growing studio and streaming possessions from lucrative but shrinking cable television business, providing a clearer financial investment photo and likely setting the stage for a sale or spin-off of the cable television system.

The media veteran and advisor anticipated Paramount and others may take a similar path.

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

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

Zaslav indicated that scenario 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, unlocking to media industry consolidation.

Zaslav had actually taken part in merger talks with Paramount late last year, though an offer never ever materialized, according to a regulative filing last month.

Others injected a note of care, keeping in mind Warner Bros Discovery carries $40.4 billion in financial obligation.

"The structure modification would make it much easier for WBD to offer off its linear TV networks," eMarketer analyst Ross Benes said, referring to the cable television service. "However, finding a buyer will be challenging. The networks owe money and have no signs of development."

In August, Warner Bros Discovery documented the worth of its TV properties by over $9 billion due to uncertainty around fees from cable television and satellite distributors and sports betting rights renewals.

This week, the media company revealed a multi-year offer increasing the overall costs Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is wagering the Comcast contract, together with an offer reached this year with cable television and broadband company Charter, will be a template for future settlements with distributors. 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)