Shares dive 13% after restructuring statement

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

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Challenges seen in offering debt-laden direct TV networks

(New throughout, includes information, background, remarks from market experts and analysts, updates share prices)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday decided to separate its decreasing cable TV services such as CNN from streaming and studio operations such as Max, laying the foundation for a potential sale or spinoff of its TV company as more cable television customers cut the cable.

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

Media business are thinking about alternatives for fading cable businesses, a longtime money cow where earnings are deteriorating as millions of consumers welcome streaming video.

Comcast last month unveiled strategies to divide many of its NBCUniversal cable television networks into a brand-new public business. The brand-new company would be well capitalized and positioned to get other cable 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 properties are a "extremely sensible partner" for Comcast's new spin-off business.

"We strongly believe there is potential for fairly substantial synergies if WBD's linear networks were integrated with Comcast SpinCo," composed Ehrlich, using the industry term for traditional 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 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 along with 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 lastly paying off.

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

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's brand-new corporate structure will differentiate growing studio and streaming possessions from rewarding however shrinking cable television organization, providing a clearer financial investment image and most likely setting the phase for a sale or spin-off of the cable television system.

The media veteran and consultant forecasted Paramount and others might take a comparable course.

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 placing the business for its next chess relocation, wrote MoffettNathanson expert Robert Fishman.

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

Zaslav signaled that scenario during Warner Bros Discovery's investor call last month. He stated he anticipated President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media industry combination.

Zaslav had taken part in merger talks with Paramount late in 2015, though an offer never emerged, according to a regulative 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 easier for WBD to sell off its direct TV networks," eMarketer expert Ross Benes stated, referring to the cable television organization. "However, finding a buyer will be challenging. The networks are in financial obligation and have no indications of development."

In August, Warner Bros Discovery jotted down the worth of its TV possessions by over $9 billion due to unpredictability around costs from cable and satellite suppliers and sports betting rights renewals.

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

Warner Bros Discovery is wagering the Comcast agreement, together with an offer reached this year with cable and broadband company Charter, will be a design template for future settlements with distributors. That might help support 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)