Shares jump 13% after reorganizing statement

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

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Challenges seen in offering debt-laden linear TV networks

(New throughout, includes details, background, comments 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 decided to separate its declining cable television organizations such as CNN from streaming and studio operations such as Max, preparing for a possible sale or spinoff of its TV business as more cable customers cut the cable.

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

Media business are thinking about alternatives for fading cable television TV organizations, a longtime golden goose where incomes are eroding as millions of consumers accept streaming video.

Comcast last month unveiled strategies to divide the majority of its NBCUniversal cable networks into a brand-new public company. The brand-new business would be well capitalized and placed to obtain other cable networks if the market combines, one source told Reuters.

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

"We highly think there is capacity for relatively substantial synergies if WBD's direct networks were integrated with Comcast SpinCo," composed Ehrlich, utilizing the industry term for conventional television.

"Further, we believe WBD's standalone streaming and studio possessions would be an appealing takeover target."

Under the brand-new structure for Warner Bros Discovery, the cable organization 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 different department together with film 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 lastly settling.

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

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's new business structure will differentiate growing studio and streaming properties from profitable but diminishing cable television organization, providing a clearer investment photo and most likely setting the stage for a sale or spin-off of the cable television unit.

The media veteran and adviser anticipated Paramount and others may take a similar path.

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

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

Zaslav indicated that situation during Warner Bros Discovery's financier call last month. He said he expected President-elect Donald Trump's administration would be friendlier to deal-making, opening the door 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 regulatory filing last month.

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

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

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

This week, the media company revealed a multi-year deal increasing the total costs Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is wagering the Comcast agreement, together with a deal reached this year with cable television and broadband company Charter, will be a design template for future negotiations with distributors. 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)