bet9ja.com
Shares dive 13% after restructuring announcement
Follows course taken by Comcast's brand-new spin-off company
*
Challenges seen in selling debt-laden linear TV networks
(New throughout, adds details, background, remarks from industry insiders and analysts, updates share rates)
By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni
Dec 12 (Reuters) - Warner Bros on Thursday decided to separate its declining cable companies such as CNN from streaming and studio operations such as Max, laying the foundation for a prospective sale or spinoff of its TV service as more cable television customers cut the cable.
Shares of Warner leapt after the company stated the brand-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 organizations, a longtime cash cow where profits are deteriorating as countless customers accept streaming video.
Comcast last month revealed plans to divide the majority of its NBCUniversal cable television networks into a new public business. The brand-new business would be well capitalized and placed to acquire other cable networks if the industry consolidates, one source told Reuters.
Bank of America research expert Jessica Reif Ehrlich composed that Warner Bros Discovery's cable television service assets are a "really rational partner" for Comcast's new spin-off company.
"We highly think there is capacity for fairly large synergies if WBD's direct networks were combined with Comcast SpinCo," wrote Ehrlich, using the market term for standard television.
"Further, our company believe WBD's standalone streaming and studio assets would be an attractive takeover target."
Under the new structure for Warner Bros Discovery, the cable TV company including TNT, Animal Planet and CNN will be housed in an unit called Global Linear Networks.
Streaming platforms Max and Discovery+ will be under a separate department in addition to film studios, consisting of Warner Bros Pictures and New Line Cinema.
The restructuring shows an inflection point for the media industry, as financial investments in streaming services such as Warner Bros Discovery's Max are finally paying off.
"Streaming won as a habits," stated Jonathan Miller, primary executive of digital media investment company Integrated Media. "Now, it's winning as a company."
Brightcove CEO Marc DeBevoise said Warner Bros Discovery's brand-new corporate structure will distinguish growing studio and streaming possessions from lucrative but diminishing cable television TV organization, providing a clearer investment picture and likely setting the stage for a sale or spin-off of the cable unit.
The media veteran and advisor predicted Paramount and others might take a similar path.
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 company for its next chess move, composed MoffettNathanson analyst Robert Fishman.
"The concern is not whether more pieces will be walked around or knocked off the board, or if further consolidation will take place-- it refers who is the purchaser and who is the seller," wrote Fishman.
Zaslav signaled that scenario during Warner Bros Discovery's financier call last month. He stated he expected President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media industry consolidation.
Zaslav had taken part in merger talks with Paramount late in 2015, though an offer never materialized, according to a regulative filing last month.
Others injected a note of caution, keeping in mind Warner Bros Discovery carries $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 stated, describing the cable television TV service. "However, finding a buyer will be tough. The networks are in debt and have no signs of development."
In August, Warner Bros Discovery documented the value of its TV properties by over $9 billion due to unpredictability around fees from cable television and satellite distributors and sports betting rights renewals.
bet9ja.com
This week, the media business revealed a multi-year offer increasing the overall fees 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 supplier Charter, will be a design template for future settlements with suppliers. That could assist stabilize pricing for the domestic pay TV market. (Reporting by Deborah Sophia and Aditya Soni in Bengaluru, Dawn Chmielewski in Los Angeles
1
Warner Bros Discovery Sets Stage For Potential Cable Deal By
Jacelyn Grimes edited this page 2 months ago