In a transformative move for the media industry, Warner Bros. Discovery (WBD) is reportedly on the verge of splitting its operations into two distinct entities, separating its traditional cable TV networks from its thriving streaming and studio divisions. According to CNBC’s David Faber, who discussed the development on Squawk on the Street following WBD’s first-quarter earnings call on May 8, 2025, the company is poised to announce this restructuring in the “not-too-distant future.” The split aims to address the declining profitability of cable TV while capitalizing on the growth of streaming and studio operations.
The proposed division would see WBD’s linear cable networks—such as CNN, TNT, TBS, Discovery Channel, HGTV, and TLC—spun off into a standalone company, potentially dubbed “SpinCo” in line with industry trends. Meanwhile, the Warner Bros. studio, HBO, and the Max streaming platform would form a separate entity focused on high-growth areas. Faber noted that WBD has already laid the groundwork for this split, having restructured its operations in December 2024 into two segments: Global Linear Networks and Streaming & Studios. This restructuring, designed to enhance “strategic flexibility,” has streamlined the process for a potential spinoff or sale of cable assets by mid-2025.
The move comes as the cable TV industry faces mounting challenges, with cord-cutting and audience fragmentation eroding ad revenues. WBD’s cable networks saw a 7% revenue decline in Q1 2025, driven by a 17% drop in domestic advertising and a 28% decline in audience numbers. In contrast, the company’s streaming business is flourishing, with Max adding 5.3 million subscribers in Q1, bringing its total to 122 million.
Faber highlighted that WBD’s recent financial reporting, which broke down performance by segment rather than grouping cable and streaming, signals the company’s intent to move forward with the split. However, challenges remain, particularly the allocation of WBD’s $34.6 billion debt, a lingering burden from its 2022 merger. How this debt will be apportioned between the two entities is a critical question, with Faber suggesting that WBD may explore raising equity for the Max and studio arm or spinning off the cable networks to shareholders.
The spinoff aligns WBD with competitors like Comcast, which plans to launch its own cable network spinoff, Versant, by mid-2025, excluding Bravo but including MSNBC and CNBC. Industry observers see Lionsgate’s profitable spinoff of Starz as a blueprint, suggesting that shedding cable assets could unlock shareholder value and allow WBD to focus on its more dynamic streaming and studio businesses.
While WBD CEO David Zaslav has not publicly confirmed the spinoff, the company’s strategic moves and the broader industry shift away from linear TV underscore the likelihood of this restructuring. As media conglomerates pivot to streaming, WBD’s potential split could reshape its future, positioning it for growth in a rapidly evolving entertainment landscape.
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