Warner Bros. Discovery splits linear business, restructures for future challenges

The company announced through its board of directors, the implementation of reorganization plans intending to boost its strategic capabilities and offer shareholders enhanced value.

By  Storyboard18Dec 13, 2024 9:43 AM
Warner Bros. Discovery splits linear business, restructures for future challenges
This restructuring is intended to provide more clarity and focus for each division, setting the stage for potential future spin-offs.

Warner Bros. Discovery has announced to reshape its corporate structure, aiming to separate its traditional linear television operations from its streaming and production divisions. This move is part of the broader trend seen across major media companies seeking to adjust to the rapidly changing entertainment industry, particularly influenced by the rise of streaming services.

The company announced through its board of directors, the implementation of reorganization plans intending to boost its strategic capabilities and offer shareholders enhanced value. Essentially, Warner Bros. Discovery (WBD) will transition to serve as the parent company for two distinct units: Global Linear Networks and Streaming & Studios. This restructuring is intended to provide more clarity and focus for each division, setting the stage for potential future spin-offs.

David Zaslav, CEO of WBD, said, "Our new corporate structure aligns our organization and enhances our flexibility with potential future strategic opportunities across the media ecosystem."

Zaslav stated. "We aim to leverage this momentum to critically evaluate all avenues to deliver significant shareholder value." This shift follows the examples set by companies such as Comcast, which recently announced similar plans for its NBCUniversal cable assets.

Within Warner Bros. Discovery's new framework, the Global Linear Networks division will encompass its traditional television channels—including CNN and HBO—while the Streaming & Studios division will focus on enhancing its digital offerings, including the Max and Discovery+ streaming services.

"The structure change would make it easier for WBD to sell off its linear TV networks," eMarketer analyst Ross Benes said, referring to the cable TV business. "However, finding a buyer will be challenging. The networks are in debt and have no signs of growth."

In August, Warner Bros Discovery wrote down the value of its TV assets by over $9 billion due to uncertainty around fees from cable and satellite distributors and sports rights renewals.

Recently, Comcast confirmed announced its spin off most of its cable channels, including MSNBC and CNBC, into a separate publicly traded company. Comcast announced that the new entity will include USA Network, CNBC, MSNBC, Oxygen, E!, SYFY, and the Golf Channel, along with several “complementary digital assets” such as Fandango, Rotten Tomatoes, GolfNow, and SportsEngine.

First Published on Dec 13, 2024 9:43 AM

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