Entertainment giant announces huge shakeup as it SPLITS into two separate companies

Daily Mail​

2 days ago

Warner Bros. Discovery has announced bombshell plans to split the massive brand into two distinctive companies.
The media giant will halve into two publicly traded entities - Streaming & Studios and Global Networks - by mid-2026, according to a Monday press release.
Streaming & Studios' domain will be Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, and HBO Max.
Global Networks, on the other hand, will be more news focused, including CNN, TNT Sports and Discovery, among other programming.
CEO David Zaslav will assume the leading role of the Streaming & Studios company, while CFO Gunnar Wiedenfels will become the President of Global Networks.
'By operating as two distinct and optimized companies in the future, we are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today's evolving media landscape,' Zaslav said.
Wiedenfels agreed this is a strategic move that will strength the 'specific financial profiles' of each company.
'At Global Networks, we will focus on further identifying innovative ways to work with distribution partners to create value for both linear and streaming viewers globally while maximizing our network assets and driving free cash flow,' he asserted.
WBD higher-ups believe the split will 'unlock' new opportunities for shareholders and the individual businesses.
In the statement, the company said it intends on a tax-free separation for 'US federal income tax purposes.'
Until the official structure-shift, Zaslav will continue running the entire company.
This split decision comes as WBD shares are down by three percent, as of midday on Monday.
Since the 2022 merger between Warner Bros. and Discovery, WBD's stock remains roughly 60 percent down, Reuters reported.
Extreme competition among streaming services and a rapid decline in cable viewership have contributed to this stark decline.
Experts warn slashing the company in half will only make matters worse.
'If anything, [it] could make them worse off by favoring financial engineering over focusing on improving existing operations or pursuing new opportunities for growth,' Brian Wieser, CEO of media advisory firm Madison and Wall, told Reuters.
'A deal like this can hamstring both sides of the company until the transactions are closed.'
Most of the company's current debt - a whopping $38 billion as of March - will be assumed by Global Networks, Reuters reported.
WBD also shared on Monday that the company received a $17.5 billion bridge loan from JP Morgan to help tackle some of the financial deficit.
These drastic measures appear to be an expansion upon an earlier announcement from WBD, sharing plans to use a model dividing the company into two branches within itself.
The company proposed a new operating structure in December 2024, to be implemented by mid-2025.
One of the divisions - the Global Linear Networks - is focused on its television business.
The second, called Streaming & Studios, is driven toward streaming platforms and setting up 'strategic opportunities' for the future.
The media company described the Global Linear Network as 'a premier linear television business that operates some of the most renowned networks with compelling news, sports, scripted and unscripted programming'.
Its entertainment-based counterpart will be 'a globally scaled streaming platform and storied film and entertainment studios with a portfolio of the world's most beloved intellectual property'.
Zaslav said at the time: 'Since the combination that created Warner Bros. Discovery, we have transformed our business and improved our financial position while providing world class entertainment to global audiences.