Shares dive 13% after restructuring announcement

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

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Challenges seen in selling debt-laden direct TV networks

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

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

Media companies are thinking about options for fading cable television services, a long time golden goose where incomes are deteriorating as countless customers welcome streaming video.

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

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

"We strongly think there is potential for relatively sizable synergies if WBD's linear networks were integrated with Comcast SpinCo," composed Ehrlich, using the industry term for conventional tv.

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

Under the new structure for Warner Bros Discovery, the cable TV organization 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, consisting of Warner Bros Pictures and New Line Cinema.

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

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

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's brand-new business structure will differentiate growing studio and streaming properties from successful but diminishing cable organization, giving a clearer financial investment picture and most likely setting the stage for a sale or spin-off of the cable television system.

The media veteran and advisor forecasted Paramount and others might 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 placing the business for its next chess move, composed MoffettNathanson analyst Robert Fishman.

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

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

Zaslav had actually participated in merger talks with Paramount late last year, though a deal never 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 change would make it much easier for WBD to sell its linear TV networks," eMarketer expert Ross Benes said, referring to the cable service. "However, finding a buyer will be difficult. The networks owe money and have no signs of development."

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

This week, the media company announced a multi-year deal increasing the overall charges 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 company Charter, will be a design template for future negotiations with distributors. That might help support 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)