Shares jump 13% after reorganizing statement

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

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Challenges seen in offering debt-laden linear TV networks

(New throughout, includes information, background, remarks from industry experts and analysts, updates share rates)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday chose to separate its decreasing cable businesses such as CNN from streaming and studio operations such as Max, laying the groundwork for a potential sale or spinoff of its TV organization as more cable customers cut the cord.

Shares of Warner leapt after the business stated the new structure would be more deal friendly and it expected to complete the split by the middle of 2025. Warner shares closed at $12.49, up more than 15%.

Media companies are considering alternatives for fading cable businesses, a long time money cow where profits are deteriorating as countless customers embrace streaming video.

Comcast last month revealed plans to split many of its NBCUniversal cable television networks into a brand-new public business. The new company would be well capitalized and placed 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 properties are a "extremely logical partner" for Comcast's brand-new spin-off business.

"We strongly think there is capacity for fairly large synergies if WBD's linear networks were combined with Comcast SpinCo," composed Ehrlich, using the market term for standard television.

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

Under the brand-new structure for Warner Bros Discovery, the cable company consisting of 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 along with movie studios, consisting of 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 paying off.

"Streaming won as a habits," said Jonathan Miller, president of digital media investment firm Integrated Media. "Now, it's winning as a company."

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's brand-new business structure will separate growing studio and streaming properties from profitable however shrinking cable television TV service, providing a clearer investment image and most likely setting the phase for a sale or spin-off of the cable unit.

The media veteran and consultant forecasted Paramount and others may take a comparable 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 placing the business for its next chess relocation, composed MoffettNathanson expert Robert Fishman.

"The question is not whether more pieces will be walked around or knocked off the board, or if further combination will take place-- it is a matter of who is the buyer and who is the seller," wrote Fishman.

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

Zaslav had participated in merger talks with Paramount late last year, though a deal never ever materialized, according to a regulatory filing last month.

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

"The structure modification would make it simpler for WBD to sell its direct TV networks," eMarketer expert Ross Benes said, referring to the cable television TV business. "However, discovering a purchaser will be tough. The networks are in financial obligation and have no signs of growth."

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

Today, the media company announced a multi-year offer increasing the overall charges Comcast will pay to distribute Warner Bros Discovery's networks.

Warner Bros Discovery is sports betting the Comcast contract, together with an offer reached this year with cable and broadband provider Charter, will be a template for future negotiations with suppliers. That might help stabilize 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)