Shares jump 13% after restructuring announcement

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

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Challenges seen in offering debt-laden linear TV networks

(New throughout, includes details, background, comments from market experts and analysts, updates share prices)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

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

Shares of Warner leapt after the business said the brand-new structure would be more deal friendly and it anticipated to finish the split by the middle of 2025. Warner shares closed at $12.49, up more than 15%.

Media business are thinking about choices for fading cable TV services, a longtime golden goose where earnings are eroding as millions of customers welcome streaming video.

Comcast last month revealed plans to divide the majority of its NBCUniversal cable networks into a brand-new public company. The brand-new company would be well capitalized and positioned to get other cable television networks if the market combines, one source informed Reuters.

Bank of America research study expert Jessica Reif Ehrlich wrote that Warner Bros Discovery's cable possessions are a "really sensible partner" for Comcast's brand-new spin-off business.

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

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

Under the brand-new structure for Warner Bros Discovery, the cable TV organization including TNT, Animal Planet and CNN will be housed in a system called Global Linear Networks.

Streaming platforms Max and Discovery+ will be under a different division in addition to film studios, including Warner Bros Pictures and New Line Cinema.

The restructuring reflects an inflection point for the media market, as investments in streaming services such as Warner Bros Discovery's Max are lastly paying off.

"Streaming won as a behavior," said Jonathan Miller, chief executive of digital media investment firm Integrated Media. "Now, it's winning as a company."

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's brand-new corporate structure will separate growing studio and streaming properties from profitable but diminishing cable organization, providing a clearer financial investment picture and likely setting the phase for a sale or spin-off of the cable television system.

The media veteran and adviser forecasted Paramount and others might take a similar course.

CEO David Zaslav, a veteran deal-maker who led Discovery through its acquisition of Scripps Networks Interactive before acquiring the even bigger target, AT&T's WarnerMedia, is placing 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 further debt consolidation will take place-- it refers who is the purchaser and who is the seller," composed Fishman.

Zaslav indicated that scenario throughout Warner Bros Discovery's financier call last month. He stated he expected President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to media industry debt consolidation.

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

Others injected a note of care, keeping in mind Warner Bros Discovery brings $40.4 billion in financial obligation.

"The structure modification would make it simpler for WBD to offer off its direct TV networks," eMarketer analyst Ross Benes stated, describing the cable company. "However, discovering a buyer will be challenging. The networks owe money and have no signs of growth."

In August, Warner Bros Discovery made a note of the value of its TV possessions by over $9 billion due to unpredictability around costs from cable and satellite distributors and sports betting rights renewals.

Today, the media company revealed a multi-year deal increasing the general charges Comcast will pay to distribute Warner Bros Discovery's networks.

Warner Bros Discovery is sports betting the Comcast arrangement, together with a deal reached this year with cable television and broadband company Charter, will be a design template for future negotiations with distributors. That might assist support prices 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)