Warner Bros. Discovery announced Monday plans to split the media conglomerate into two separate entities, according to a report in The Wall Street Journal. The two portions of the company will separate the traditional television wing from the streaming and content production wing. Additionally, The Wall Street Journal reports that company CEO David Zaslav will remain in his current role with the streaming and content production portion, while Gunner Wiedenfels, the company’s CFO, will lead the traditional television wing.
According to a memo to Warner Bros. Discovery staff obtained by the WSJ, Zaslav felt confident in the decision to split into two entities.
“By bringing together the Discovery and Turner networks, we have created a leader in live and unscripted television, with a truly global footprint operating at industry-leading margins,” wrote Zaslav. “We’ve transitioned our direct-to-consumer offering, as HBO Max is now one of the world’s few global and meaningfully profitable streaming services. And by fusing creative brilliance with operational excellence, we have made strong progress in returning our film and television studios to industry leadership.”
David Zaslav, who currently serves as the chief executive officer of Warner Bros. Discovery, will be leading the streaming and studio business, which will include the HBO Max streaming platform and Warner Bros. Motion Picture Group. This branch of the business will also contain Warner Bros. Television, DC Studios and studio production facilities located in Burbank and Leavesden. With Zaslav at the helm, the company aspires to build on global momentum and accrue at least $3 billion in annual adjusted EBITDA.
Furthermore, the WSJ reports that the traditional television wing will be home to CNN, TNT, TBS, and Warner’s dozens of cable channels, as well as its international holdings. Temporarily, that wing will be called Global Networks and will hold as much as a 20% stake in the second streaming wing, which Warner is referring to as Streaming & Studios.
Gunnar Weidenfels, the chief financial officer of Warner Bros. Discovery, will be in charge of the global networks entity containing brands such as CNN, TNT Sports, Discovery and Bleacher Report. These assets accrue 1.1 billion unique views across 200 countries and territories, and the brand will continue to pursue opportunities for international growth and elevating content and sports and news. The sports portfolio itself is in a state of change with the recent acquisitions of Roland-Garros, Unrivaled Basketball and the FIFA Club World Cup soccer tournament among other entities. TNT Sports recently completed its final live game broadcast of the National Basketball Association, although it will continue to produce episodes of Inside the NBA airing on ESPN platforms under a sublicensing agreement.
“This separation will invigorate each company by enabling them to leverage their strengths and specific financial profiles. This will also allow each company to pursue important investment opportunities and drive shareholder value,” Wiedenfels said in a statement. “At Global Networks, we will focus on further identifying innovative ways to work with distribution partners to create value for both linear and streaming viewers globally while maximizing our network assets and driving free cash flow.”
Moreover, it plans to use earnings from the streaming wing to pay off debt for the entire company.
“This evolution isn’t a departure from our strategy – to deploy MAX globally, optimize our global networks and return our studios to industry leadership – it’s about unlocking the full potential of two strong businesses,” said Zaslav via the memo to staff. “Each has a distinct focus, a clear mission, and the scale to success on its own terms. This next phase will create the conditions for both companies to grow with greater clarity, agility, and long-term strength.”
The announcement takes place just over three years after WarnerMedia and Discovery formally merged and occurs a few weeks after its credit rating was downgraded to BB+ status. The partition will occur by next year, with the company itself expecting to complete this tax-free transaction by the middle of 2026.
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