Shares dive 13% after restructuring announcement

Follows path taken by Comcast's new spin-off business

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Challenges seen in selling debt-laden linear TV networks

(New throughout, includes information, background, comments from industry insiders and analysts, updates share costs)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday chose to separate its decreasing cable 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 television customers cut the cable.

Shares of Warner jumped after the company stated the new structure would be more deal friendly and it anticipated to finish 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 television TV organizations, a long time golden goose where earnings are wearing down as countless consumers embrace streaming video.

Comcast last month revealed strategies to split most of its NBCUniversal cable networks into a new public company. The new company would be well capitalized and positioned to obtain other cable networks if the market consolidates, one source informed Reuters.

Bank of America research analyst Jessica Reif Ehrlich composed that Warner Bros Discovery's cable assets are a "extremely sensible partner" for Comcast's new spin-off company.

"We strongly believe there is capacity for fairly sizable synergies if WBD's direct networks were integrated with Comcast SpinCo," wrote Ehrlich, utilizing the market term for standard tv.

"Further, our company believe WBD's standalone streaming and studio possessions would be an appealing takeover target."

Under the new structure for Warner Bros Discovery, the cable service including TNT, Animal Planet and CNN will be housed in a system called Global Linear Networks.

Streaming platforms Max and Discovery+ will be under a separate division in addition to movie studios, including Warner Bros Pictures and New Line Cinema.

The restructuring shows an inflection point for the media industry, as investments in streaming services such as Warner Bros Discovery's Max are finally settling.

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

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's new business structure will differentiate growing studio and streaming assets from successful however shrinking cable business, offering a clearer financial investment picture and most likely setting the phase for a sale or spin-off of the cable system.

The media veteran and advisor forecasted Paramount and others may take a comparable path.

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 positioning the business for its next chess move, composed MoffettNathanson expert Robert Fishman.

"The question is not whether more pieces will be walked around or knocked off the board, or if more debt consolidation will occur-- it is a matter of who is the buyer and who is the seller," composed Fishman.

Zaslav signaled that scenario throughout Warner Bros Discovery's investor call last month. He said he expected President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media market combination.

Zaslav had actually taken part in merger talks with Paramount late in 2015, though a deal never emerged, according to a regulatory filing last month.

Others injected a note of caution, noting Warner Bros Discovery carries $40.4 billion in financial obligation.

"The structure modification would make it easier for WBD to offer off its direct TV networks," eMarketer expert Ross Benes stated, referring to the cable service. "However, discovering a buyer will be tough. The networks are in financial obligation and have no indications of development."

In August, Warner Bros Discovery documented the value of its TV possessions by over $9 billion due to uncertainty around charges from cable television and satellite distributors and sports betting rights renewals.

This week, the media company announced a multi-year deal increasing the overall costs Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is wagering the Comcast arrangement, together with an offer reached this year with cable television and broadband supplier Charter, will be a template for future negotiations with distributors. That might assist support rates 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)