Warner Bros. Discovery is divided into two separate companies: a dramatic shake that will create a streaming focused division and Hollywood blockbusters and the other on cable TV and global networks.
The company is trying to adapt to a world where cable television fades quickly and the streaming is King.
A company, named provisionally of global networks, will maintain family cable channels such as CNN, TBS and TNT, as well as international assets and the streaming Discovery+streaming service.
It will also have athletic content like Bleacher Report.
The other company (Streaming & Studios) will include HBO Max, Warner Bros. Movie Studios and his television production arm, which acts as popular programs and films.
Warner Bros. Discovery said that this movement will make the two companies stronger, allowing each one to focus on what they do best. He also believes that investors will value separate companies more than combined.
The CEO of Warner Bros. Discovery, David Zaslav, said that the movement aims to “enhance these iconic brands with the most intense approach and the strategic flexibility they need to compete more effectively in the current media landscape.”
This change is essentially a reversal of the 2022 merger between Warner Media (then owned by AT&T) and Discovery Communications, an agreement that aimed to create a content power that covers prestigious and reality TV films without inscriptions.
Traditional cable TV quickly loses viewers as people change to streaming platforms like Netflix, Amazon Prime Video and Disney+.
Cable subscription income is reduced and the advertising dollars are still in the case.
Warner is not the only company that reacts to this change. Comcast is also launching its cable networks in an independent company called by the end of the year.
In the first three months of 2025, the revenue of the Warner cable network dropped by 6% compared to the same period of the previous year, although these networks still provided more money than any other part of the company.
However, investors and analysts see the writing on the wall: the cable is in decline.
Zaslav will remain head of the new streaming and studies business, while the current CFO Gunnar Wiedenfels will take over as CEO of Global Networks.
Zaslav has been under pressure lately. Ever since Warner Bros. Discovery, its stock has dropped almost 60%.
Last week, 59% of shareholders voted against their $ 51.9 million mass package for 2024, a strong frustration sign of investors.
Earlier this month, the S&P Global Credit Agency reduced Warner’s debt to the state of “Brossa”, citing concerns about the decrease in cable business. In simple terms, this means that investors see the company’s debt as risky.
Warner Bros. Discovery has about $ 34 million in debt, much of the original fusion. A large part of this debt will remain with world networks.
To manage the division, the company reached a short -term loan of $ 17.5 billion from JPMMMoCanchase, which the two new companies will help pay for their new debt.
World networks are expected to use gains from their 20% participation in streaming and studies to avoid what God.
The company says this break will help the two companies grow and even give rise to new offers or acquisitions.
“The separation will allow the two companies to focus on their strengths,” said Wiedenfels.
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