Warner Bros. Discovery Shocks World Streaming and Studios Heading for Divorce!

Warner Bros. Discovery to Split CNN, TNT from HBO Max and Studios in Major Restructuring

In a seismic shift reshaping the media landscape, Warner Bros. Discovery (WBD) has announced its plan to split into two distinct companies by mid-2025. This strategic move reflects a broader trend among major media conglomerates grappling with evolving audience consumption habits.

The restructuring will carve WBD into two separate entities:

• The first company will encompass Warner's studios and streaming assets, including HBO Max, the DC Comics universe, and film production and distribution. This powerhouse will remain under the leadership of current WBD CEO David Zaslav.
• The second company will house WBD's TV networks, such as CNN and Discovery. Gunnar Wiedenfels, the current Chief Financial Officer, will helm this division, which will also inherit the majority of WBD's existing debt.

"By operating as two distinct and optimized companies in the future, we are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today’s evolving media landscape," Zaslav stated, emphasizing the rationale behind the split.

Industry analysts predict this move will likely spark a new wave of mergers and acquisitions within the traditional TV sector. Legacy TV has been significantly impacted by cord-cutting, as consumers increasingly migrate to streaming services and social video platforms like TikTok. WBD's decision mirrors Comcast's earlier announcement to spin off its cable networks, including CNBC, MSNBC, and others, into a new entity named Versant.

This announcement validates earlier reports suggesting WBD was considering such a split as Zaslav sought to stabilize the company's financial standing. The company initiated restructuring efforts in December, widely perceived as a prelude to a complete separation.

Zaslav's tenure at the helm of WBD, since its formation in 2022, has been marked by challenges. He quickly addressed speculation regarding a potential sale shortly after the conglomerate's launch. Furthermore, he faced criticism for decisions such as shelving completed film projects and the short-lived tenure of Chris Licht as CNN chairman and CEO.

Wall Street's reaction to WBD has been less than favorable, with the company's shares plummeting approximately 60% since Zaslav's appointment. Although the stock initially surged 11% in early trading following the announcement, it subsequently turned negative by the afternoon.

Bank of America analysts recently noted that WBD was "not working as a publicly traded entity" and suggested that "transformative changes" were necessary, despite acknowledging the "tremendous value" of WBD's core media properties.

In a recent investor call, Zaslav mentioned the company is evaluating the future location of WBD's streaming sports initiatives, recognizing that they have not been a significant driver for HBO Max. WBD recently lost the rights to the NBA to NBCUniversal and Amazon's Prime Video.

The split of Warner Bros. Discovery represents a significant turning point for the media giant and underscores the immense pressures faced by traditional media companies in the age of streaming. While the future remains uncertain, this strategic maneuver signals a proactive attempt to navigate the complexities of the evolving entertainment landscape and position its iconic brands for long-term success. It will be interesting to watch how these two newly formed companies adapt and compete in the years to come.

Tags: Warner Bros, HBO Max, CNN, Media split, David Zaslav, Streaming, TV Networks, Business news, Discovery, WBD

Source: https://www.nbcnews.com/business/media/warner-bros-discovery-split-cnn-tnt-hbo-streaming-service-studios-rcna211776