Warner Bros Discovery to revamp structure, setting up potential dealmaking
Warner Bros.Discovery said Thursday that it is restructuring into two operating divisions — with one focusing on its struggling legacy cable TV business and the other on streaming and studios — in a rejigger 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 movie and TV studio Warner Bros.The streaming 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 persuade Wall Street that it is set up 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 enhances our flexibility with potential future strategic opportunities across an evolving media landscape.”Currently, Warner Bros.
Discovery has three segments—networks, studios and direct-to-consumer streaming.The CEO said he expects the new structure to be set up by the middle of 2025.Media companies with cable TV businesses, which are no longer growth engines, are mulling ways to best manage the divisions while still growing.
Last month, Comcast said it will spin off a trove of its cable networks, including MSNBC and CNBC, into a standalone company next year.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, The Wall Street Journal reported.What’s more, Comcast is a larger and more varied business with theme parks and broadband businesses, allowing it to better handle such a move.Warner Bros.
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