The week began with an important announcement from Warner Bros. Discovery that it will divide itself into two separate companies. After the split, a larger division named “Global Networks” will operate the company’s current cable TV channels, including CNN, TNT, and TBS, and a smaller unit called “Streaming & Studios” will run its HBO Max streaming service and film and TV studios.
This follows a similar move last fall at NBCUniversal, when it announced that it would spin off most of its cable assets into a separate business named Versant. While WBD’s potential breakup had been rumored for weeks, the announcement provided details on how the company will manage the decline of its cable TV business and sizeable debts.
Each unit will emerge as a stand-alone, publicly-traded company, although Global Networks will retain a 20% share of the Studios & Streaming company. Most of the current company’s outstanding debts will pass to Global Networks.
The deal is expected to close in approximately one year, by the middle of 2026, with current WBD CEO David Zaslav becoming the CEO of Streaming & Studios while current CFO Gunnar Wiedenfels takes over the CEO role at Global Networks.
This dramatic change unwinds the results of the WarnerMedia and Discovery merger in 2022, with most Discovery cable assets going into the new Global Networks company, far away from the HBO Max streaming network. Some are questioning the leadership of Zaslav, who led the Warner Bros. and Discovery merger and championed its synergies.
After the separation, each business will be freer to pursue partnerships and combinations within the industry. For example, Apple could acquire WBD’s studio and streaming business without having to take on its cable operations. Or if NBCUniversal’s newly created cable company wanted to merge with WBD’s cable stations, it would not have to pay a premium to also acquire WBD’s studio and streaming assets.
