4 days ago
Warner Bros Discovery splits streaming from cable TV in latest media shakeup
Warner Bros Discovery said it would split into two publicly traded companies, separating its studios and streaming business from its fading cable television networks as the parent of HBO and CNN looks to compete better in the streaming era.
The breakup is the latest unraveling of decades of media consolidation that created global conglomerates spanning content creation, distribution and, in some cases, telecommunications. It unwinds WarnerMedia and Discovery's 2022 merger, aiming to grow the streaming and studios business without the drag of the declining networks unit.
The new streaming and studios company will include Warner Bros, DC Studios and HBO Max, the crown jewels of WBD's entertainment library.
The networks unit, which will hold up to a 20% stake in its counterpart, will house CNN, TNT Sports and Bleacher Report.
CEO David Zaslav will lead the streaming and studios unit, while CFO Gunnar Wiedenfels will head the networks unit. The separation will be structured as a tax-free transaction and is expected to be completed by mid-2026.
"We've continued to analyse how our industry is evolving," Zaslav told investors.
"The right path forward became increasingly clear, to separate global networks and streaming and studios into two independent, publicly traded companies."
Most of the company's debt would be held by the global networks company. WBD had gross debt of $38bn (R672.6bn) as of March. The company said it secured a $17.5bn (R310bn) bridge loan from JP Morgan that it would use to restructure its debt.
Creditors of WBD are consulting advisers after the entertainment company proposed banning investor cooperation pacts as part of its plan to split, the Wall Street Journal reported on Monday.
