Shares jump 13% after restructuring statement

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

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Challenges seen in offering debt-laden direct TV networks

(New throughout, adds details, background, comments from industry experts and experts, updates share rates)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday chose to separate its declining cable companies such as CNN from streaming and studio operations such as Max, preparing for a potential sale or spinoff of its TV service as more cable television subscribers cut the cord.

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

Media business are thinking about choices for fading cable television organizations, a longtime cash cow where incomes are eroding as millions of consumers accept streaming video.

Comcast last month unveiled strategies to split the majority of its NBCUniversal cable television networks into a new public company. The new company would be well capitalized and placed to obtain other cable networks if the market consolidates, one source told Reuters.

Bank of America research analyst Jessica Reif Ehrlich composed that Warner Bros Discovery's cable television service possessions are a "very rational partner" for Comcast's brand-new spin-off business.

"We strongly think there is potential for fairly sizable synergies if WBD's direct networks were integrated with Comcast SpinCo," composed Ehrlich, utilizing the industry term for standard tv.

"Further, we think WBD's standalone streaming and studio possessions would be an attractive takeover target."

Under the brand-new structure for Warner Bros Discovery, the cable television service including 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 in addition to film studios, consisting of Warner Bros Pictures and New Line Cinema.

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

"Streaming won as a habits," stated Jonathan Miller, president of digital media investment firm Integrated Media. "Now, it's winning as an organization."

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's brand-new corporate structure will differentiate growing studio and streaming possessions from rewarding but diminishing cable television business, providing a clearer investment photo and likely setting the stage for a sale or spin-off of the cable television system.

The media veteran and advisor forecasted Paramount and others might take a similar path.

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

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

Zaslav signaled that situation during Warner Bros Discovery's financier call last month. He said he prepared for President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media market combination.

Zaslav had participated in merger talks with Paramount late last year, though a deal never ever emerged, according to a regulatory filing last month.

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

"The structure modification would make it simpler for WBD to sell its direct TV networks," eMarketer expert Ross Benes said, describing the cable company. "However, discovering a buyer will be difficult. The networks owe money and have no signs of growth."

In August, Warner Bros Discovery jotted down the value of its TV properties by over $9 billion due to uncertainty around fees from cable television and satellite suppliers and sports betting rights renewals.

Today, the media business announced a multi-year offer increasing the overall costs Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is wagering the Comcast contract, together with an offer reached this year with cable television and broadband company Charter, will be a design template for future negotiations with distributors. That could help stabilize 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)