Shares jump 13% after reorganizing statement

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

*

Challenges seen in selling debt-laden linear TV networks

(New throughout, adds details, background, comments from market insiders and experts, updates share rates)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

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

Shares of Warner leapt after the business said the brand-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 options for fading cable television TV organizations, a longtime golden goose where earnings are eroding as millions of customers embrace streaming video.

Comcast last month unveiled plans to split the majority of its NBCUniversal cable networks into a new public company. The new business would be well capitalized and placed to acquire other cable television networks if the market consolidates, one source informed Reuters.

Bank of America research analyst Jessica Reif Ehrlich composed that Warner Bros Discovery's cable tv possessions are a "really sensible partner" for Comcast's brand-new spin-off company.

"We highly believe there is capacity for relatively substantial synergies if WBD's direct networks were integrated with Comcast SpinCo," wrote Ehrlich, using the industry term for conventional television.

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

Under the new structure for Warner Bros Discovery, the cable television company 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 along with film studios, consisting of Warner Bros Pictures and New Line Cinema.

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

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

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's new business structure will separate growing studio and streaming assets from profitable however shrinking cable company, giving a clearer investment picture and most likely setting the stage for a sale or spin-off of the cable television system.

The media veteran and consultant forecasted 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 obtaining the even bigger target, AT&T's WarnerMedia, is placing the company for its next chess relocation, 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 happen-- it refers who is the purchaser and who is the seller," wrote Fishman.

Zaslav signaled that scenario during Warner Bros Discovery's financier call last month. He said he expected President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media market consolidation.

Zaslav had actually 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 caution, keeping in mind Warner Bros Discovery carries $40.4 billion in debt.

"The structure modification would make it much easier for WBD to sell its linear TV networks," eMarketer expert Ross Benes said, describing the cable business. "However, discovering a buyer will be difficult. The networks are in financial obligation 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 television and satellite suppliers and sports betting rights renewals.

Today, the media business revealed a multi-year offer increasing the total charges Comcast will pay to distribute Warner Bros Discovery's networks.

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