Warner Bros. Discovery is being divided into two separate companies – a dramatic shock that will create a concentrated partition in transmission blockages and Hollywood and the other on cable TV and global networks.
The company is trying to adapt to a world where cable TV is fading quickly and broadcasting is king.
A company – called Global Networks – will hold cable channels known as CNN, TBS and TNT, as well as international assets and discovery+transmission service.
He will also own sports content like Bleacher Report.
Other company – Streaming & Studios – will include HBO Max, Warner Bros. Movie Studios and her arm of television production, which makes popular performances and movies.
Warner Bros. Discovery said the move will make the two strongest companies allowing each to focus on what does best. He also believes that investors will value companies more than the combined.
Director General of Warner Bros. Discovery David Zaslav said the mass aims to “empower these iconic brands with the sharpest focus and strategic flexibility they need to compete more effectively in today’s development of media.”
This change is essentially an overthrow of the 2022 union between Warner Media (then owned by AT&T) and Discovery Communications – an agreement aimed at creating an electrical content plant that includes prestige films and TV reality.
Traditional cable TV is rapidly losing viewers as people move on streaming platforms like Netflix, Amazon Prime Video and Disney+.
Cable reconciliation income is decreasing, and advertising dollars are following the lawsuit.
Warner is not the only company that responds to this shift. Comcast is also rolling its cable networks in a special company called Versant by the end of the year.
In the first three months of 2025, Warner’s cable revenue dropped 6% from the same period last year – however those networks still brought more money than any other part of the company.
Even so, investors and analysts see the writing on the wall: the cable is falling.
Zaslav will stay at the top of the new business streaming & studios, while CFO current Gunnar Wiedenfels will take over as CEO of Global Networks.
Zaslav has been under pressure lately. Since Warner Bros. The discovery was formed, its stock has fallen nearly 60%.
Last week, 59% of the shareholders voted against his massive salary package $ 51.9 million for 2024 – a strong sign of the investor’s disappointment.
Earlier this month, the S&P Global Credit Agency deducted Warner’s debt for “Junk” status, citing concerns about the declining business of cables. In simple words, this means that investors see the company’s debt as dangerous.
Warner Bros. Discovery is transporting about $ 34 billion in debt, most of it received during the original union. Much of this debt will remain with global networks.
To manage the division, the company secured a $ 17.5 billion short loan from JPMORGANCHASE, which both new companies will help pay their new debt.
Global Networks is expected to use revenue from 20% of his streaming & studios to give up what owes him.
The company says this division will help both businesses grow and even make room for new deals or purchases.
“Sharing will allow both companies to focus on their strengths,” Wiedenfels said.
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