Shares dive 13% after restructuring announcement

Follows path taken by Comcast's new spin-off company

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Challenges seen in selling debt-laden linear TV networks

(New throughout, includes details, background, remarks from industry experts and experts, updates share prices)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday decided to separate its declining cable television organizations such as CNN from streaming and studio operations such as Max, laying the foundation for a potential sale or spinoff of its TV service as more cable subscribers cut the cord.

Shares of Warner jumped after the company said the new structure would be more deal friendly and it anticipated to complete the split by the middle of 2025. Warner shares closed at $12.49, up more than 15%.

Media companies are thinking about options for fading cable television TV companies, a longtime golden goose where earnings are wearing down as countless customers embrace streaming video.

Comcast last month revealed plans to split most of its NBCUniversal cable television networks into a new public business. The brand-new business would be well capitalized and positioned to obtain other cable networks if the industry consolidates, one source informed Reuters.

Bank of America research study expert Jessica Reif Ehrlich composed that Warner Bros Discovery's cable television service assets are a "extremely sensible partner" for Comcast's new spin-off company.

"We strongly think there is potential for fairly large synergies if WBD's direct networks were combined with Comcast SpinCo," wrote Ehrlich, utilizing the market term for traditional television.

"Further, we think WBD's standalone streaming and studio assets would be an attractive takeover target."

Under the new structure for Warner Bros Discovery, the cable service 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 department along with movie studios, including Warner Bros Pictures and New Line Cinema.

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

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

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's new business structure will differentiate growing studio and streaming possessions from profitable but diminishing cable television TV company, providing a clearer financial investment picture and most likely setting the phase for a sale or spin-off of the cable television system.

The media veteran and adviser anticipated Paramount and others might take a comparable path.

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

"The question is not whether more pieces will be moved or knocked off the board, or if more debt consolidation will happen-- it refers who is the purchaser and who is the seller," wrote Fishman.

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

Zaslav had taken part in merger talks with Paramount late in 2015, though a deal never emerged, according to a regulative filing last month.

Others injected a note of care, noting Warner Bros Discovery carries $40.4 billion in financial obligation.

"The structure modification would make it simpler for WBD to sell its linear TV networks," eMarketer analyst Ross Benes stated, referring to the cable service. "However, discovering a buyer will be challenging. The networks owe money and have no signs of development."

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

This week, the media business revealed a multi-year offer increasing the general charges Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is sports betting the Comcast agreement, together with a deal reached this year with cable television and broadband company Charter, will be a template for future negotiations with distributors. That could help support rates 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)