Shares jump 13% after reorganizing announcement

Follows path taken by Comcast's brand-new spin-off business

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Challenges seen in selling debt-laden linear TV networks

(New throughout, includes information, background, remarks from industry experts and analysts, updates share rates)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday decided to separate its decreasing cable television services such as CNN from streaming and studio operations such as Max, preparing for a potential sale or spinoff of its TV company as more cable television subscribers cut the cable.

Shares of Warner jumped after the company stated the new structure would be more deal friendly and it expected to finish the split by the middle of 2025. Warner shares closed at $12.49, up more than 15%.

Media companies are thinking about alternatives for fading cable television companies, a long time golden goose where profits are wearing down as countless customers embrace streaming video.

Comcast last month unveiled strategies to split many of its NBCUniversal cable television networks into a brand-new public company. The brand-new business would be well capitalized and positioned to acquire other cable television networks if the industry consolidates, one source told Reuters.

Bank of America research study expert Jessica Reif Ehrlich composed that Warner Bros Discovery's cable television properties are a "extremely rational partner" for Comcast's new spin-off business.

"We strongly believe there is potential for fairly large synergies if WBD's linear networks were combined with Comcast SpinCo," wrote Ehrlich, using the market term for standard television.

"Further, we believe WBD's standalone streaming and studio properties would be an attractive takeover target."

Under the new structure for Warner Bros Discovery, the cable organization consisting of TNT, Animal Planet and CNN will be housed in an unit called Global Linear Networks.

Streaming platforms Max and Discovery+ will be under a different division along with movie studios, including Warner Bros Pictures and New Line Cinema.

The restructuring shows an inflection point for the media industry, as investments in streaming services such as Warner Bros Discovery's Max are finally settling.

"Streaming won as a habits," stated Jonathan Miller, president of digital media financial investment company Integrated Media. "Now, it's winning as a business."

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's new corporate structure will distinguish growing studio and streaming properties from successful however diminishing cable TV business, offering a clearer investment picture and most likely setting the phase for a sale or spin-off of the cable unit.

The media veteran and consultant anticipated Paramount and others may take a similar course.

CEO David Zaslav, a veteran deal-maker who led Discovery through its acquisition of Scripps Networks Interactive before getting the even bigger target, AT&T's WarnerMedia, is positioning the company for its next chess move, wrote MoffettNathanson analyst Robert Fishman.

"The concern is not whether more pieces will be walked around or knocked off the board, or if additional consolidation will happen-- it refers who is the buyer and who is the seller," composed Fishman.

Zaslav signified that situation during Warner Bros Discovery's financier call last month. He stated he prepared for President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media market debt consolidation.

Zaslav had actually participated in merger talks with Paramount late in 2015, though a deal never emerged, according to a regulative filing last month.

Others injected a note of care, noting Warner Bros Discovery carries $40.4 billion in financial obligation.

"The structure change would make it easier for WBD to sell its linear TV networks," eMarketer expert Ross Benes said, referring to the cable television TV organization. "However, finding a buyer will be challenging. The networks are in debt and have no signs of growth."

In August, Warner Bros Discovery wrote down the value of its TV assets by over $9 billion due to unpredictability around costs from cable television and satellite distributors and sports betting rights renewals.

This week, the media company revealed a multi-year offer increasing the total costs Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is sports betting the Comcast contract, together with a deal reached this year with cable and broadband company Charter, will be a template for future negotiations with suppliers. That could assist stabilize rates for the domestic pay TV market. (Reporting by Deborah Sophia and Aditya Soni in Bengaluru, Dawn Chmielewski in Los Angeles; Editing by Shilpi Majumdar, Arun Koyyur, Keith Weir and David Gregorio)