WBD To Split Into Two Publicly Traded Entities

Warner Bros. Discovery (WBD) is splitting into two independent, publicly traded companies, separating its HBO Max streaming service, film studio, and TV production from its cable networks.

One entity, tentatively named Global Networks, will include CNN, TNT, TBS, other cable channels, and international assets. It will hold up to a 20% stake in the second entity, called Streaming & Studios, using earnings to reduce debt.

The Wall Street Journal reports the move largely reverses the 2022 Warner Media-Discovery merger, dividing Warner’s premium film and TV from Discovery’s reality and nonfiction content.

Like Disney and Paramount Global, Warner faces declining cable network ratings and revenue as consumers shift to streaming. Comcast is also spinning off most of its cable networks into a new company, Versant, by year-end.

David Zaslav

Warner believes its parts are more valuable separately, aiming to compete with streaming giants like Netflix and Amazon Prime Video, unencumbered by legacy cable operations.

Announced last year, the restructuring into two divisions aims to unlock shareholder value and enhance agility in a dynamic media landscape, Warner said Monday.

CEO David Zaslav will lead Streaming & Studios, while CFO Gunnar Wiedenfels will head Global Networks.

Zaslav faces pressure to lift WBD’s stock price, down about 59% since the merger. S&P Global Ratings recently downgraded Warner’s debt to junk status due to cable network struggles. Last week, over 59% of shareholders rejected Zaslav’s $51.9 million 2024 compensation package, signaling discontent with leadership pay.

The merger has been challenging for employees, with thousands laid off over three years as WBD cuts costs and manages significant debt from the deal.

Global Networks will include Discovery+, CNN’s planned streaming service, and U.S. sports assets like Bleacher Report, alongside cable properties.