Shares dive 13% after reorganizing announcement

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

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Challenges seen in selling debt-laden linear TV networks

(New throughout, includes details, background, comments from industry experts and experts, updates share costs)

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 organizations such as CNN from streaming and studio operations such as Max, laying the foundation for a possible sale or spinoff of its TV business as more cable customers cut the cord.

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

Media companies are thinking about choices for fading cable television TV services, a long time money cow where revenues are wearing down as countless consumers welcome streaming video.

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

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

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

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

Under the brand-new structure for Warner Bros Discovery, the cable company 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 department along with 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 lastly paying off.

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

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's brand-new business structure will separate growing studio and streaming properties from successful but shrinking cable company, offering a clearer financial investment photo and most likely setting the stage for a sale or spin-off of the cable unit.

The media veteran and advisor predicted 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 obtaining the even larger target, AT&T's WarnerMedia, is positioning the company for its next chess move, composed MoffettNathanson expert Robert Fishman.

"The concern is not whether more pieces will be moved or knocked off the board, or if further combination will take place-- it is a matter of who is the buyer and who is the seller," composed Fishman.

Zaslav signaled that circumstance throughout Warner Bros Discovery's financier 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 debt consolidation.

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

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

"The structure change would make it much easier for WBD to sell its linear TV networks," eMarketer expert Ross Benes stated, referring to the cable television company. "However, finding a purchaser will be difficult. The networks owe money and have no indications of growth."

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

This week, the media business revealed a multi-year deal increasing the total charges Comcast will pay to disperse 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 service provider Charter, will be a template for future settlements with suppliers. That might help 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)