Warner Bros. Discovery said it was restructuring the company by creating two separate divisions, one for its legacy linear networks, the other for its streaming and studio businesses.
The move echoes the announcement last month that Comcast NBCUniversal would be spinning off most of its cable networks into a new publicly traded company. The WBD restructuring could pave the way for an eventual sale or spinoff of its linear assets.
Warner Bros. Discovery stock was up 15% to $12.49 in morning trading Thursday.
The company said it expects the new structure to be in place by mid-2025. It did not announce who would be running the new divisions.
Warner Bros. Discovery had been troubled by a high debt load, losses in streaming and declining revenue and profits at its linear networks.
In the third quarter, the company’s direct-to-consumer business, which includes Max and HBO, was in the black, reporting adjusted earnings before interest, taxes, depreciation and amortization of $289 million,
But earnings at the networks segment was down 12% to $2.1 billion.
WBD said that the new global linear networks division will focus on maximizing profitability and free cash flow, enabling the company to pay down debt. The global streaming and studios division will focus on growth on returns on increasing invested capital.
“We continue to prioritize ensuring our Global Linear Networks business is well positioned to continue to drive free cash flow, while our Streaming & Studios business focuses on driving growth by telling the world’s most compelling stories,” said CEO David Zaslav. “Our new corporate structure better aligns our organization and enhances our flexibility with potential future strategic opportunities across an evolving media landscape, help us build on our momentum and create opportunities as we evaluate all avenues to deliver significant shareholder value.”
In addition, the company said it expects to continue to evolve its board to execute its strategy and drive future shareholder value creation.
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