Warner Bros. Discovery is likely planning to split the company between cable networks and streaming, and the move may come quickly, according to sources on CNBC.
If the plan goes through, the linear cable networks would be split from the studio and Max, according to CNBC’s David Faber who spoke about the plan on “Squawk on the Street” on Thursday, following the company’s quarterly earnings call.
“What Warner Brothers is moving towards, though, is a split, and it’s become relatively clear to me from the many conversations that I’ve had that we could get some sort of an announcement in the not too distant future that they are planning to try to split the company,” Farber said. “What would that split look like? Well, most likely, or almost definitely, it’s the linear cable networks and then you have the studio coupled with Max.”
Farber says the split could happen soon, noting that “they’ve already done all of the reapportioning necessary.”
Farber also pointed to this morning’s Q1 financial call, where Warner Bros. Discovery broke down financials by segment, rather than grouping cable and streaming. “Streaming has its own page, studios and linear, global linear segments, network segment as well,” Farber said. Following that call, there was an initial decline in Warner Bros. Discovery’s shares due to revenue being less than estimated. While linear cable is struggling, the company’s streaming assets are thriving and saw an increase of 5.3 million subscribers in Q1, ending the quarter with 122 million subscribers.