Shares dive 13% after restructuring announcement

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

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Challenges seen in offering debt-laden direct TV networks

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

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

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

Shares of Warner leapt after the company said 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 TV companies, a long time money cow where incomes are wearing down as countless customers welcome streaming video.

Comcast last month unveiled plans to divide many of its NBCUniversal cable networks into a brand-new public company. The new company would be well capitalized and placed to acquire other cable networks if the market combines, one source told Reuters.

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

"We strongly believe there is capacity for relatively sizable synergies if WBD's linear networks were integrated with Comcast SpinCo," composed Ehrlich, utilizing the industry term for conventional television.

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

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

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

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

"Streaming won as a habits," said Jonathan Miller, chief executive of digital media financial investment business Integrated Media. "Now, it's winning as an organization."

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's new corporate structure will differentiate growing studio and streaming possessions from profitable but shrinking cable organization, offering a clearer investment picture and most likely setting the phase for a sale or spin-off of the cable television system.

The media veteran and adviser forecasted Paramount and others may take a comparable 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 company for its next chess move, wrote MoffettNathanson analyst 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 purchaser and who is the seller," composed Fishman.

Zaslav indicated that circumstance 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, unlocking to media industry consolidation.

Zaslav had engaged in merger talks with Paramount late in 2015, though an offer never ever materialized, according to a regulatory filing last month.

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

"The structure modification would make it much easier for WBD to sell its direct TV networks," eMarketer expert Ross Benes stated, referring to the cable TV business. "However, finding a purchaser will be tough. The networks are in financial obligation and have no signs of development."

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

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

Warner Bros Discovery is wagering the Comcast agreement, together with an offer reached this year with cable and broadband company Charter, will be a template for future settlements with suppliers. That might assist 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)