Shares jump 13% after restructuring statement

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

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Challenges seen in offering debt-laden linear TV networks

(New throughout, includes information, background, comments from market experts and experts, updates share costs)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday chose to separate its declining cable organizations 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 subscribers cut the cable.

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

Media business are considering choices for fading cable businesses, a longtime golden goose where profits are wearing down as countless consumers welcome streaming video.

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

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

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

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

Under the brand-new structure for Warner Bros Discovery, the cable television 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 separate department in addition to movie studios, consisting of Warner Bros Pictures and New Line Cinema.

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

"Streaming won as a behavior," stated Jonathan Miller, president of digital media investment firm Integrated Media. "Now, it's winning as an organization."

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's new business structure will distinguish growing studio and streaming possessions from rewarding however diminishing cable television organization, offering a clearer financial investment picture and most likely setting the phase for a sale or spin-off of the cable television system.

The media veteran and consultant anticipated 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 acquiring the even bigger target, AT&T's WarnerMedia, is placing the business for its next chess move, composed MoffettNathanson analyst Robert Fishman.

"The concern is not whether more pieces will be moved or knocked off the board, or if more combination will take place-- it is a matter of who is the purchaser and who is the seller," composed Fishman.

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

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

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

"The structure change would make it easier for WBD to sell its linear TV networks," eMarketer analyst Ross Benes stated, referring to the cable organization. "However, finding a buyer will be tough. The networks owe money and have no indications of growth."

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

Today, the media business announced a multi-year offer 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 an offer reached this year with cable and broadband service provider Charter, will be a design template for future settlements with distributors. That could help stabilize 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)