Warner Bros Discovery Announces Major Restructuring
Warner Bros Discovery is undergoing a significant reorganization, effectively creating two distinct entities: one dedicated to streaming and blockbuster films, and the other focused on cable television and international networks.
This change comes as the company seeks to navigate a landscape where traditional cable is rapidly losing ground to streaming services.
One part of this new structure, called the Global Network, encompasses well-known cable channels and international assets, along with Discovery+ streaming services that feature CNN, TBS, and TNT. They also manage sports content like Bleacher Report.
The other division, Streaming & Studios, includes HBO Max, Warner Bros. Movie Studios, and its TV production division.
Warner Bros Discovery believes that this separation will strengthen both companies, allowing them to focus on their core competencies. They suggest that investors might appreciate distinct companies more than a merged entity.
CEO David Theslav has emphasized the need to provide these well-known brands with clearer focus and strategic flexibility to compete effectively in today’s changing media environment.
This development essentially reverses the 2022 merger between Warner Media, previously owned by AT&T, and Discovery Communications, which aimed to create a robust content powerhouse spanning both prestigious films and unscripted reality TV.
As traditional cable quickly loses viewership to platforms like Netflix, Amazon Prime Video, and Disney+, revenue from cable subscriptions has also been declining, with advertising revenues dwindling alongside it.
Interestingly, Warner isn’t alone in this strategy. Comcast is also spinning off its cable network into a new company called Versant by year’s end.
In the first quarter of 2025, revenue from Warner’s cable networks dropped by 6% compared to the same period last year, although these networks still generated more revenue than other segments of the company.
Yet, many investors and analysts recognize the looming decline of cable television.
Zaslav will head the new Streaming & Studios division, while current CFO Gunnar Wiedenfels will step in as CEO of Global Networks.
Zaslav has faced increasing pressure, with Warner Bros Discovery’s stock plummeting nearly 60% since its formation.
Recently, 59% of shareholders rejected an almost $52 million salary package for 2024, signaling notable investor dissatisfaction.
Additionally, earlier this month, the credit rating agency S&P downgraded Warner’s debt to “junk” status, highlighting concerns regarding the decline of its cable business.
Warner Bros Discovery currently carries about $34 billion in debt, mostly accrued during the initial merger, with a significant portion in the global network.
To facilitate the separation, the company has secured a $17.5 billion short-term loan from JPMorgan Chase, aimed at helping both new entities manage their debts through the issuance of new financial obligations.
The Global Network plans to leverage revenue from its streaming and studio ventures, which holds a 20% stake, to help address its debt burden.
The company asserts that this split will enable both new entities to flourish and potentially open doors for new deals and acquisitions. “This separation will allow both companies to focus on their strengths,” Wiedenfels explained.
