Shares jump 13% after reorganizing statement

Follows course taken by Comcast's new spin-off company

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Challenges seen in offering debt-laden linear TV networks

(New throughout, includes details, background, comments from market insiders 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 decreasing cable organizations such as CNN from streaming and studio operations such as Max, preparing for a possible sale or spinoff of its TV organization as more cable subscribers cut the cord.

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

Media companies are considering options for fading cable companies, a longtime cash cow where profits are eroding as countless consumers welcome streaming video.

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

Bank of America research expert Jessica Reif Ehrlich composed that Warner Bros Discovery's cable television service assets are a "really logical partner" for Comcast's brand-new spin-off business.

"We strongly think there is potential for relatively large synergies if WBD's direct networks were integrated with Comcast SpinCo," wrote Ehrlich, utilizing the market term for standard tv.

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

Under the brand-new structure for Warner Bros Discovery, the cable service including TNT, Animal Planet and CNN will be housed in a system called Global Linear Networks.

Streaming platforms Max and Discovery+ will be under a separate division in addition to film studios, consisting of Warner Bros Pictures and New Line Cinema.

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

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

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's brand-new business structure will separate growing studio and streaming properties from rewarding however shrinking cable television organization, providing a clearer financial investment photo and most likely setting the phase for a sale or spin-off of the cable system.

The media veteran and consultant anticipated Paramount and others might take a comparable path.

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

"The concern is not whether more pieces will be walked around or knocked off the board, or if additional consolidation will occur-- it refers who is the buyer and who is the seller," wrote Fishman.

Zaslav signaled that circumstance throughout Warner Bros Discovery's investor call last month. He stated he prepared for President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media industry consolidation.

Zaslav had participated in merger talks with Paramount late last year, though an offer never materialized, according to a regulatory filing last month.

Others injected a note of caution, noting Warner Bros Discovery brings $40.4 billion in debt.

"The structure modification would make it simpler for WBD to offer off its direct TV networks," eMarketer expert Ross Benes said, referring to the cable TV service. "However, discovering a purchaser will be difficult. The networks are in debt and have no indications of growth."

In August, Warner Bros Discovery jotted down the worth of its TV possessions by over $9 billion due to unpredictability around charges from cable and satellite suppliers and sports betting rights renewals.

This week, the media business revealed a multi-year deal increasing the total charges Comcast will pay to distribute Warner Bros Discovery's networks.

Warner Bros Discovery is wagering the Comcast contract, together with a deal reached this year with cable television and broadband service provider Charter, will be a design template for future negotiations with distributors. That could assist stabilize prices 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)