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Shares jump 13% after reorganizing statement

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

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Challenges seen in offering debt-laden direct TV networks

(New throughout, includes details, background, remarks from industry insiders and experts, updates share costs)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

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

Shares of Warner leapt after the business said the new structure would be more deal friendly and it expected to complete the split by the middle of 2025. Warner shares closed at $12.49, up more than 15%.

Media companies are considering alternatives for fading cable TV businesses, a long time cash cow where incomes are eroding as countless consumers embrace streaming video.

Comcast last month revealed plans to split most of its NBCUniversal cable networks into a brand-new public business. The brand-new company would be well capitalized and placed to obtain other cable television networks if the market consolidates, one source told Reuters.

Bank of America research study analyst Jessica Reif Ehrlich wrote that Warner Bros Discovery's cable properties are a "extremely rational partner" for Comcast's brand-new spin-off business.

"We highly believe there is capacity for relatively large synergies if WBD's linear networks were integrated with Comcast SpinCo," composed Ehrlich, using the market term for conventional television.

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

Under the brand-new structure for Warner Bros Discovery, the cable television TV company consisting of TNT, Animal Planet and CNN will be housed in an unit called Global Linear Networks.

Streaming platforms Max and Discovery+ will be under a separate department along with movie studios, consisting of Warner Bros Pictures and New Line Cinema.

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

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

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's brand-new corporate structure will distinguish growing studio and streaming possessions from successful however shrinking cable television TV business, providing a clearer financial investment image and likely setting the stage for a sale or spin-off of the cable unit.

The media veteran and adviser anticipated Paramount and others might take a comparable course.

CEO David Zaslav, a veteran deal-maker who led Discovery through its acquisition of Scripps Networks Interactive before obtaining the even larger target, AT&T's WarnerMedia, is placing the business for its next chess relocation, composed MoffettNathanson analyst Robert Fishman.

"The question is not whether more pieces will be moved around or knocked off the board, or if further combination will happen-- it refers who is the buyer and who is the seller," wrote Fishman.

Zaslav signaled that scenario during Warner Bros Discovery's financier call last month. He stated he prepared for President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to media industry combination.

Zaslav had engaged in merger talks with Paramount late last year, though an offer never emerged, according to a regulative filing last month.

Others injected a note of care, keeping in mind Warner Bros Discovery brings $40.4 billion in debt.

"The structure change would make it easier for WBD to offer off its direct TV networks," eMarketer expert Ross Benes said, describing the cable television organization. "However, discovering a buyer will be difficult. The networks are in debt and have no indications of growth."

In August, Warner Bros Discovery made a note of the value of its TV properties by over $9 billion due to uncertainty around costs from cable television and satellite distributors and sports betting rights renewals.

Today, the media company revealed a multi-year deal increasing the general costs Comcast will pay to disperse Warner Bros .

Warner Bros Discovery is wagering the Comcast agreement, together with an offer reached this year with cable television and broadband provider Charter, will be a design template for future negotiations with distributors. That might assist stabilize prices 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)