Shares dive 13% after reorganizing statement

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

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Challenges seen in offering debt-laden direct TV networks

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

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

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

Shares of Warner jumped after the business 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 business are thinking about choices for fading cable television organizations, a longtime golden goose where revenues are wearing down as countless consumers welcome streaming video.

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

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

"We highly believe there is capacity for fairly large synergies if WBD's linear networks were integrated with Comcast SpinCo," composed Ehrlich, using the market term for conventional tv.

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

Under the new structure for Warner Bros Discovery, the cable service 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 department together 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 lastly 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 separate growing studio and streaming assets from profitable however diminishing cable TV organization, offering a clearer investment image and likely setting the phase for a sale or spin-off of the cable television unit.

The media veteran and adviser forecasted Paramount and others may take a similar path.

CEO David Zaslav, a veteran deal-maker who led Discovery through its acquisition of Scripps Networks Interactive before obtaining the even larger target, AT&T's WarnerMedia, is placing the business for its next chess move, wrote MoffettNathanson expert Robert Fishman.

"The question is not whether more pieces will be moved or knocked off the board, or if more consolidation will happen-- it is a matter of who is the buyer and who is the seller," composed Fishman.

Zaslav signaled that situation throughout Warner Bros Discovery's investor call last month. He stated he prepared for President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media market combination.

Zaslav had actually engaged in merger talks with Paramount late last year, though an offer never materialized, according to a regulatory filing last month.

Others injected a note of caution, keeping in mind Warner Bros Discovery carries $40.4 billion in debt.

"The structure modification would make it much easier for WBD to offer off its direct TV networks," eMarketer analyst Ross Benes said, referring to the cable television business. "However, discovering a purchaser will be challenging. The networks owe money and have no signs of growth."

In August, Warner Bros Discovery jotted down the worth of its TV assets by over $9 billion due to uncertainty around costs from cable and satellite suppliers and sports betting rights renewals.

This week, the media business announced a multi-year deal increasing the total fees Comcast will pay to distribute Warner Bros Discovery's networks.

Warner Bros Discovery is wagering the Comcast contract, together with a deal reached this year with cable and broadband company Charter, will be a design template for future settlements with distributors. That could help support 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)