Warner Bros. Discovery to split into two, separating CNN and cable networks from streaming

Warner Bros. Discovery recently announced a significant restructuring that will see the media giant split into two separate publicly traded companies. This move will divide the company’s assets, with one company focusing on cable networks like CNN and TNT Sports, while the other will focus on streaming services and studios, including HBO Max and Warner Bros. Television.

According to a statement released by the company, David Zaslav, the current CEO of Warner Bros. Discovery, will lead the Streaming & Studios division, while Gunnar Wiedenfels, the CFO of Warner Bros. Discovery, will head the Global Networks division, which includes the cable networks. The split is expected to be completed by mid-2026 and is seen as a strategic decision to unlock shareholder value and pursue new investment opportunities.

The decision to separate the businesses comes after Warner Bros. Discovery struggled following its merger in 2022, which combined WarnerMedia with Discovery. The company’s cable networks have faced challenges as viewers increasingly turn to streaming services, leading to a decline in stock value since the merger closed over three years ago.

One of the key focuses of the restructured Warner Bros. Discovery will be scaling up HBO Max, which is currently available in 77 markets. The company aims to add 150 million subscribers to its streaming business by the end of 2026, signaling a strong commitment to the growing digital media landscape.

While the streaming business has performed well, the studio business has faced challenges, with a significant drop in revenue in the first quarter of this year. Overall, the company reported a 9% decline in revenue compared to the same period last year.

In response to these challenges, Warner Bros. Discovery has undertaken a series of strategic moves, including the reorganization of its corporate structure in December. This restructuring reflects a broader trend in the media industry, as legacy companies adapt to changing consumer preferences and technological advancements.

Other major players in the media landscape, such as Comcast and Paramount Global, have also undergone significant changes, including spin-offs and mergers, in response to shifting market dynamics. These moves highlight the ongoing transformation of the industry as companies seek to navigate the evolving digital media landscape.

In conclusion, Warner Bros. Discovery’s decision to split into two separate entities represents a strategic move to drive growth and unlock value for shareholders. By focusing on the strengths of each business segment, the company aims to position itself for success in a rapidly changing media environment.