Shares jump 13% after reorganizing statement

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

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Challenges seen in selling debt-laden direct TV networks

(New throughout, includes information, background, comments from industry 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 businesses such as CNN from streaming and studio operations such as Max, preparing for a prospective sale or spinoff of its TV business as more cable customers cut the cable.

Shares of Warner jumped after the business stated 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 businesses, a long time money cow where profits are wearing down as countless customers accept streaming video.

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

Bank of America research analyst Jessica Reif Ehrlich composed that Warner Bros Discovery's cable television service possessions are a "very logical partner" for Comcast's new spin-off company.

"We highly think there is potential for relatively substantial synergies if WBD's direct networks were combined with Comcast SpinCo," composed Ehrlich, utilizing the market term for conventional tv.

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

Under the brand-new structure for Warner Bros Discovery, the cable TV business 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 separate department in addition to film studios, including Warner Bros Pictures and New Line Cinema.

The restructuring shows 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," 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 brand-new corporate structure will distinguish growing studio and streaming possessions from successful but diminishing cable television TV service, offering a clearer investment picture and likely setting the phase for a sale or spin-off of the cable television unit.

The media veteran and advisor anticipated 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 larger target, AT&T's WarnerMedia, is positioning the business for its next chess move, wrote MoffettNathanson expert Robert Fishman.

"The question is not whether more pieces will be moved or knocked off the board, or if further debt consolidation will occur-- it refers who is the purchaser and who is the seller," wrote Fishman.

Zaslav signified that scenario during Warner Bros Discovery's investor call last month. He stated he expected President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to media market combination.

Zaslav had taken part in merger talks with Paramount late in 2015, though an offer never ever emerged, according to a regulatory filing last month.

Others injected a note of care, noting 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, describing the cable television company. "However, finding a buyer will be challenging. The networks owe money and have no indications of development."

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

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

Warner Bros Discovery is sports betting the Comcast arrangement, together with a deal reached this year with cable television and broadband supplier Charter, will be a template for future negotiations with suppliers. That could assist stabilize prices 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)