Warner Bros. Discovery said Thursday it is restructuring into two operating divisions — with one focusing on its legacy cable TV business and the other on broadcasting and studios — in a reorganization that could set it up for “strategic opportunities” down the road.
The media giant — in what insiders called a sign of optimism that regulations around mergers and acquisitions will be friendlier under the Trump administration — will merge the unit that includes streaming services Max and Discovery+ and HBO with a division that includes the studio movies and television Warner Bros .
The broadcast and studios unit will sit alongside the company’s legacy cable unit, which includes networks such as CNN, TNT, TBS, Food Network and HGTV.
The move comes as the New York-based conglomerate tries to convince Wall Street that it is designed to compete with entertainment giants such as Disney, Netflix, Apple and Amazon.
In a statement, the chief executive of Warner Bros. Discovery CEO David Zaslav said the new structure “better aligns our organization and increases our flexibility with potential future strategic opportunities in an evolving media landscape.”
Currently, Warner Bros. Discovery has three segments: networks, studios and direct-to-consumer broadcasting. The CEO said he expects the new structure to be up and running by mid-2025.
Media companies with cable TV businesses that are no longer growth engines are looking at ways to best manage divisions while still growing.
Last month, Comcast said it would spin off a number of cable networks, including MSNBC and CNBC, into an independent company next year.
While the same strategy has been discussed in Warner Bros. Discovery would be a bigger challenge for the company to absorb the financial blow of losing cable profits, The Wall Street Journal reported.
Additionally, Comcast is a larger and more diversified business with theme parks and broadband businesses, allowing it to better handle such a move.
Warner Bros. Discovery said it “looks forward to continuing to evolve the Board to execute its strategy and drive the creation of future shareholder value.”
Warner Bros. Discovery’s streaming business is at the heart of its growth strategy. The company currently has around 110 million subscribers globally for its streaming services.
Meanwhile, the company’s cable TV unit has struggled as consumers continue to cut their cable plans in favor of streaming and advertisers shift more of their spending to digital platforms. Earlier this year, Warner took a $9.1 billion writedown on the value of its cable networks.
Despite these challenges, the cable network unit is still the biggest revenue generator for the firm.
During the first nine months of this year, the cable unit posted $15.4 billion in revenue, down 3% from the same period a year ago.
Since 2022 when Warner Media merged with Discovery to form the media giant, insiders have speculated that the company would eventually be an acquisition target or merge with another firm.
Zaslav explored combining with Paramount Global earlier this year, but Paramount ultimately decided to join Skydance Media instead in a deal expected to close in the first half of 2025.
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