Warner Bros. Discovery to split into 2 companies

Thomson Reuters

· Posted: Jun 09, 2025 5:19 PM EDT | Last Updated: 3 hours ago

Warner Bros. Discovery said it would divided into 2 publically traded companies, separating its studios and streaming concern from its fading cablegram tv networks arsenic the genitor company of HBO and CNN looks to amended competition in the streaming era.

The breakup is the latest unravelling of decades of media consolidation that created planetary conglomerates spanning contented creation, organisation and successful immoderate cases, telecommunications. It unwinds WarnerMedia and Discovery's anterior merger in 2022, aiming to turn the streaming and studios concern without the declining networks portion weighing them down.

The caller streaming-and-studios institution volition see Warner Bros., DC Studios and HBO Max — the crown jewels of Warner Bros. Discovery's amusement library.

The networks unit, which volition clasp up to a 20 per cent stake successful its counterpart, volition location CNN, TNT Sports and Bleacher Report.

CEO David Zaslav volition pb the streaming and studios unit, portion CFO Gunnar Wiedenfels volition caput the networks unit. The separation volition beryllium structured arsenic a tax-free transaction and is expected to beryllium completed by mid-2026.

"We've continued to analyse however our manufacture is evolving," Zaslav told investors. "The close way guardant became progressively wide … to abstracted planetary networks and streaming and studios into 2 independent, publically traded companies."

Most of the company's indebtedness would beryllium held by the planetary networks company. Warner Bros. Discovery had gross indebtedness of $38 cardinal US arsenic of March. The institution said it secured a $17.5 cardinal US span indebtedness from J.P. Morgan that it would usage to restructure its debt.

Shares were down astir three per cent astatine midday, aft rising by arsenic overmuch arsenic 13 per cent successful the hours aft the announcement.

Stock down since merger

Warner Bros. Discovery's banal remains down astir 60 per cent since the merger, wounded by cablegram subscriber loss, pugnacious streaming contention and capitalist concerns implicit the debt-laden company's direction.

Brian Wieser, CEO of Madison and Wall, an advisory steadfast for media, exertion and different companies, said the divided volition not hole underlying weakness astatine Warner Bros. Discovery.

If anything, Wieser said, it "could marque them worse disconnected by favouring fiscal engineering implicit focusing connected improving existing operations oregon pursuing caller opportunities for maturation … a woody similar this tin hamstring some sides of the institution until the transactions are closed."

Media executives had initially anticipated a question of consolidation nether U.S. President Donald Trump's administration, though that has not travel to pass.

"For a bid of reasons, that proved harder than anyone thought," said Jonathan Miller, a seasoned media enforcement who present serves arsenic main enforcement of Integrated Media. "It looks similar the diagnostic of this twelvemonth volition beryllium however bash we get our location successful order, and bash what we tin that's nether our control."

Comcast is spinning disconnected astir of its NBCUniversal cablegram networks portfolio into a abstracted company, Versant. Lions Gate Entertainment completed the separation of its Starz cablegram web from its movie and tv workplace successful May.

Such breaking up of media conglomerates could acceptable the signifier for further deal-making, said 1 seasoned media enforcement who spoke connected information of anonymity.

Last week, astir 59 per cent of Warner Bros. Discovery shareholders astatine the yearly gathering voted against enforcement wage packages, including Zaslav's $51.9 cardinal US 2024 compensation, successful an advisory ballot that signaled dissatisfaction.

Like different amusement companies, Warner Bros. Discovery is struggling with declining ratings and gross astatine its cablegram networks. Consumers person been dropping pay-television subscriptions successful favour of streaming services.