CNN parent Warner Bros. Discovery to split into two companies

Axios

3 hours ago

Warner Bros. Discovery, the parent company to cable channels such as CNN, TBS and TNT, announced Monday that it plans split into two publicly traded companies, largely parting its television networks from its streaming business.
Why it matters: Without NBA TV rights, the value proposition of WBD's cable networks had fallen significantly, despite the fact that they still provide the company with steady cash flows.
Zoom in: WBD Streaming & Studios will include HBO, Warner Bros. Pictures and DC Studios, while WBD Global Networks will include CNN, TNT Sports U.S. and Discovery.
WBD president and CEO David Zaslav will become president of WBD Streaming & Studios. WBD CFO Gunnar Wiedenfels will become president and CEO of WBD Global Networks.
The company expects the separation to be completed by the middle of next year.
What they're saying: WBD said the decoupling would help both companies "be faster and more aggressive in pursuing opportunities that strengthen their competitive positions."
"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 in a statement.
Catch up quick: WBD has been exploring a spinoff for some time. Last December, it announced a new corporate structure that divided its linear television business from its streaming and studio businesses.
The move, the company said at the time, would "enhance its strategic flexibility and create potential opportunities to unlock additional shareholder value."
It had also explored mergers with cable companies like Paramount Global, but talks never materialized.
Zoom out: Amid cord-cutting, more entertainment giants are eyeing ways to offload their legacy TV assets to focus on streaming.
Comcast said last year it plans to spin off NBCUniversal's cable networks into a separate, publicly traded company. That collection of assets, which includes USA Network, CNBC, MSNBC, Oxygen, E!, SYFY, Golf Channel and others, will be part of a corporate parent called Versant.
Disney CEO Bob Iger in 2023 teased the possible sale of the firm's linear TV assets, including its broadcast network ABC, but later suggested interest in that idea had cooled.