Shares jump 13% after reorganizing statement

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

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Challenges seen in selling debt-laden direct TV networks

(New throughout, includes details, background, remarks from industry experts and analysts, 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 companies such as CNN from streaming and studio operations such as Max, preparing for a possible sale or spinoff of its TV service as more cable television subscribers cut the cord.

Shares of Warner jumped after the business stated the new structure would be more deal friendly and it expected to finish 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 businesses, a long time golden goose where earnings are eroding as countless customers welcome streaming video.

Comcast last month revealed strategies to split many of its NBCUniversal cable networks into a new public company. The brand-new company would be well capitalized and placed to acquire other cable networks if the market consolidates, one source told Reuters.

Bank of America research study expert Jessica Reif Ehrlich wrote that Warner Bros Discovery's cable tv possessions are a "very logical partner" for Comcast's brand-new spin-off company.

"We highly think there is potential for relatively substantial synergies if WBD's linear networks were combined with Comcast SpinCo," wrote Ehrlich, utilizing the industry term for conventional television.

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

Under the brand-new structure for Warner Bros Discovery, the cable business 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 different division in addition to movie studios, including Warner Bros Pictures and New Line Cinema.

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

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

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

The media veteran and adviser predicted Paramount and others may take a similar course.

CEO David Zaslav, a veteran deal-maker who led Discovery through its acquisition of Scripps Networks Interactive before acquiring the even bigger target, AT&T's WarnerMedia, is positioning the business for its next chess move, composed MoffettNathanson analyst Robert Fishman.

"The question is not whether more pieces will be walked around or knocked off the board, or if further combination will occur-- it refers who is the buyer and who is the seller," composed Fishman.

Zaslav signaled that circumstance throughout Warner Bros Discovery's investor call last month. He stated he expected President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media industry combination.

Zaslav had actually taken part in merger talks with Paramount late last year, though a deal never emerged, according to a regulative filing last month.

Others injected a note of care, keeping in mind Warner Bros Discovery brings $40.4 billion in debt.

"The structure modification would make it much easier for WBD to offer off its direct TV networks," eMarketer analyst Ross Benes said, describing the cable service. "However, discovering a purchaser will be challenging. The networks are in financial obligation and have no signs of growth."

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

Today, the media company announced a multi-year deal increasing the overall fees Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is wagering the Comcast arrangement, together with an offer reached this year with cable television and broadband provider Charter, will be a design template for future settlements with suppliers. That could assist support pricing 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)