Warner Bros. Discovery, led by CEO David Zaslav, has become the latest Hollywood studio to restructure its corporate structure for a potential spinoff of legacy television properties.
Warner announced Thursday that it will reorganize its corporate structure into a global linear television division separated from its streaming and studio divisions. The new corporate structure is intended to “enhance strategic flexibility and create potential opportunities to unlock further shareholder value.” The studio said it will immediately begin the initial stages of a new corporate restructuring, with the effort expected to be completed by mid-2025.
In a sign of how the pay-TV business is struggling, WBD’s move comes after rival Comcast announced plans to separate its unprofitable cable network from its movie and TV studio’s entertainment and parks businesses. It’s movement. Disney CEO Bob Iger has also said publicly that the studio’s legacy television networks, including ABC, “may not be core” to the company.
And Paramount Global’s incoming CEO Jeff Shell plans to manage CBS “a little more aggressively for cash flow” given that linear TV is a “declining business.” He said he plans to do so. WBD appears to be planning to spin off all linear assets into an independent holding company so that the core of the company can return to growth.
“Since the merger that created Warner Bros. Discovery, we have continued to grow our business while delivering world-class entertainment to audiences around the world,” WBD President and CEO David Zaslav said in a statement. We have transformed our business and improved our financial position.”
“Our priority continues to be to ensure our global linear network business is well-positioned to continue to drive free cash flow, while our streaming and studio businesses continue to support the world’s most compelling stories. We focus on driving growth by communicating Our new corporate structure will better align our organization, enhance our flexibility to potential future strategic opportunities across the evolving media landscape, and deliver significant shareholder value. It will help us build momentum and create opportunities as we evaluate all avenues,” Zaslav added.
Cable operations were once a source of revenue for studios, but these days TV channels have become a drag on profits, with investors finding companies squeezed by channels tied to bundles that are rapidly falling out of favor with consumers. is blaming. Instead, I’ve been spending money on individual streaming services. The major pay-TV companies collectively lost about 5 million subscribers last year, and Comcast alone lost 2 million subscribers, according to Leichtman Research.
Under this new corporate structure, WBD will become the parent company for two distinct business units. The Global Linear Network will retain the studio’s legacy TV assets, including brands like TNT, TBS and Discovery Channel, and will offer content such as sports, scripted and unscripted programming.
Separate Streaming and Studios includes a collection of linear cable TV brands such as TNT, TBS and HLN, which are facing headwinds from cord-cutting and industry-wide efforts to stream. WBD is working to uncover the hidden value of its key assets, and the studio previously disclosed a huge $9.1 billion goodwill impairment charge to value its legacy television network.
WBD said, “The new corporate structure provides greater clarity and focus, with each division delivering on specific strategic and operational goals while executing initiatives to further advance the key priorities of the consolidated Warner Bros. Discovery.” “We are in a position to achieve this,” he said.
The studio added that it “continues to evolve its board to execute our strategy and drive future shareholder value creation.” JPMorgan, Evercore and Guggenheim Securities are advising WBD, and Kirkland & Ellis and Wachtel Lipton are serving as legal advisors.
