Global media business Warner Bros. Discovery announced today that it plans to separate itself into two publicly traded companies. The split is framed as a separation of WBD’s traditional TV networks from its TV and film studios and streaming assets, though this isn’t exactly how the company is set to be carved up.
The ‘Streaming & Studios’ company (as it’s been labelled by Warner Bros. Discovery) will seemingly take control of all of WBD’s studios — namely Warner Bros. Television, Warner Bros. Motion Picture Group, and DC Studios. On the streaming side, it will also take charge of the recently rebranded HBO Max. HBO itself will also be part of the ‘Streaming & Studios’ company, despite being a traditional pay TV business.
The Discovery+ streaming platform meanwhile finds itself on the other side of the draw, bundled in with WBD’s entertainment, sport, and news TV brands inside a ‘Global Networks’ company. CNN, TNT Sports, and Discovery’s global channels will all sit within this business, as will sports publication Bleacher Report.
David Zaslav, president and CEO of Warner Bros. Discovery, will hold the same titles at the Streaming & Studios side of the business. Meanwhile Gunnar Wiedenfels, currently CFO of the united company, will become president and CEO of the Global Networks business.
“By operating as two distinct and optimised companies in the future, we are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today’s evolving media landscape,” said Zaslav. Wiedenfels added that the separation “will invigorate each company by enabling them to leverage their strengths and specific financial profiles. This will also allow each company to pursue important investment opportunities and drive shareholder value”.
Warner Bros. Discovery says it expects the separation to complete by mid-2026.
Shifting debt?
The move mirrors fellow US-based media giant NBCUniversal’s announcement last year that it is spinning off its cable networks including CNBC, MSNBC, E!, and USA Network into a separate company called Versant. Disney CEO Bob Iger has also floated the idea of his company selling off its linear TV channels.
The challenge for these long running broadcasters has been balancing investment in their streaming services against the preservation of their linear channels. While linear audiences are falling, cable and broadcast networks are still generally profitable, and a sizeable source of revenues. For the likes of Warner Bros. Discovery, getting the balance right has proven tough. The company’s share price has fallen by around a third since the merger of Warner Bros with Discovery back in 2022, while it still has a considerable amount of debt on its balance sheet. Just last week, shareholders voted against a proposed pay package for Zaslav, signalling discontent with his leadership of the company.
The debt is likely a big motivator behind the split. The Financial Times reported last year that the company was considering such a move, aiming to free up the streaming-focused business from debt, enabling it to invest to fuel further growth.
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