Warner Bros. Discovery announced Thursday that it will reorganize into two business units. One focuses on the struggling traditional cable TV business, and the other focuses on streaming and studios. This could create “strategic opportunities” in the future.
The media giant has announced that its division, which includes streaming services Max, Discovery Plus and HBO, will continue to grow in what insiders call a sign of optimism that merger and acquisition regulations will be friendlier under the Trump administration. , plans to merge its divisions including film and television studio Warner Bros. .
The streaming and studio division will sit alongside the company’s traditional cable division, which includes networks such as CNN, TNT, TBS, Food Network and HGTV.
The move comes as the New York-based conglomerate seeks to convince Wall Street that it is poised to compete with entertainment giants such as Disney, Netflix, Apple and Amazon.
Warner Bros. Discovery CEO David Zaslav said in a statement that the new organization will “better align our organization and align it with potential future strategic opportunities across the evolving media landscape.” “We will strengthen our flexibility.”
Currently, Warner Bros. Discovery has three segments: network, studio, and direct-to-consumer streaming. The CEO said he expected the new structure to be established by mid-2025.
Media companies whose cable TV operations are no longer a growth engine are considering how to best manage their divisions as they continue to grow.
Comcast announced last month that it would spin off its cable networks, including MSNBC and CNBC, into independent companies next year.
A similar strategy is being discussed at Warner Bros. Discovery, but absorbing the financial hit from lost cable profits will be a bigger challenge for the company, the Wall Street Journal reported.
Additionally, Comcast is a large and diversified company with theme park and broadband businesses, which will allow it to respond well to these developments.
“We look forward to continuing to evolve our board to execute our strategy and drive future shareholder value creation,” Warner Bros. Discovery said in a statement.
Warner Bros. Discovery’s streaming business is central to its growth strategy. The company’s streaming service currently has approximately 110 million subscribers worldwide.
Meanwhile, the company’s cable TV division has struggled as consumers continue to cut back on cable plans in favor of streaming and advertisers shift more spending to digital platforms. Earlier this year, Warner took a $9.1 billion writedown on the value of its cable network.
Despite these challenges, the cable networks division remains the company’s largest source of revenue.
For the first nine months of this year, the cable division’s revenue was $15.4 billion, down 3% from the same period last year.
Ever since Warner Media merged with Discovery to create the media giant in 2022, insiders have speculated that the company would eventually become an acquisition target or merge with another company.
Zaslav considered merging with Paramount Global earlier this year, but Paramount ultimately decided to merge with Skydance Media instead, a deal expected to close in the first half of 2025.
