Warner Bros. Discovery said Thursday it is Restructuring into two operating divisions – One is focusing on its struggling legacy cable TV business and the other on streaming and studios – in a shift that could set it up for “strategic opportunities” in the future.
The media giant — which insiders have said is a sign of optimism that mergers and acquisitions rules will be friendlier under the Trump administration — will merge the unit that includes streaming services Max and Discovery+ and HBO, which includes movie and TV studio Warner Bros. Are. ,
The streaming and studio unit will sit alongside the company’s legacy cable unit, which includes networks like CNN, TNT, TBS, Food Network and HGTV.
The move comes as the New York-based conglomerate tries to convince Wall Street that it is ready to compete with entertainment giants like Disney, Netflix, Apple and Amazon.
In a statement, Warner Bros. Discovery Chief Executive Officer David Zaslav said the new structure “better aligns our organization and increases our flexibility with potential future strategic opportunities in the evolving media landscape.”
Currently, Warner Bros. Discovery has three divisions – network, studio, and direct-to-consumer streaming. The CEO said he hopes to have the new structure in place by mid-2025.
Media companies with cable TV businesses, which are no longer growth engines, are looking at ways to best manage divisions as they grow.
Last month, Comcast said it would terminate a group of its cable networks, Next year, MSNBC and CNBC will be combined into a standalone company.
While the same strategy has been discussed at Warner Bros. Discovery, it would be a bigger challenge for the company to absorb the financial blow of losing cable profits, according to The Wall Street Journal. informed,
Furthermore, Comcast is a larger and more diversified business, with theme park and broadband businesses, allowing it to better handle such a move.
Warner Bros. Discovery said it “expects to continue to develop the board to execute its strategy and drive shareholder value creation in the future.”
Warner Bros. Discovery’s streaming business is central to its growth strategy. The company currently has approximately 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 write-down on the value of its cable networks.
Despite those challenges, the cable networks unit is still the biggest revenue generator for the firm.
In the first nine months of this year, the cable unit generated revenue of $15.4 billion, down 3% from the same period a year earlier.
Since 2022 when WarnerMedia merged with Discovery to create the media giant, insiders have speculated that the company will eventually be a takeover target or merge with another firm.
Zaslav Combination with Paramount Global explored Earlier this year, but Paramount ultimately decided to merge with Skydance Media instead of a deal expected to close In the first half of 2025.
