Warner Bros Discovery to fragment into two separate companies

In a landmark restructuring move, Warner Bros. Discovery announced its plan to divide into two separate publicly-traded companies. Read further on Dynamite News

Los Angeles: In a landmark restructuring move, Warner Bros. Discovery announced its plan to divide into two separate publicly-traded companies, one dedicated to streaming and content creation and the other to traditional television networks, reports Dynamite News correspondent.

The company will separate its operations into two core businesses: one centred on streaming and content production, the other focused on traditional linear television.

CEO David Zaslav will remain at the helm of the streaming centric division, while Chief Financial Officer Gunnar Wiedenfels, known for his aggressive cost-cutting tactics, will lead the legacy television entity.

The separation is expected to be completed by mid-2026, subject to closing and other conditions, and the bulk of the current company’s debt — nearly $38 billion –will be assigned to the TV entity, reports VARIETY.

“By operating as two distinct and optimized companies in the future, we are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today’s evolving media landscape,” Zaslav said in a statement.

The streaming division will include Warner Bros. film and TV studios, HBO and HBO Max, along with its gaming and experimental branches. The company will focus on building out the HBO Max streaming service and investing in programming.

Meanwhile, the TV company will include Warner’s TV networks around the world along with specific digital brands tied to the TV entities, including Discovery+, Bleacher Report and CNN’s new streaming products.

The structural pivot mirrors a comparable strategy adopted by Comcast, which is segmenting NBCUniversal by transferring cable networks into a newly minted spinoff, Versant, while retaining flagship streaming and broadcast operations under NBC.

During an investor call Monday, executives suggested the two companies might continue to be aligned.

Ad sales may represent both sides of the split, executives said, and sports, while being placed with the TV company, will likely continue to stream on HBO Max for the foreseeable future, though those plans could change as the two companies plot their own strategies in the future.

“The U.S. sports rights will reside at the global networks, and its management team will determine how best to monetize the streaming and digital rights over time,” Wiedenfels said.

This change could lead to more mergers in the media industry. Paramount Global, owner of CBS, is also under financial pressure and may have to consider new rounds of cost cutting if it cannot consummate a deal it has in place to be acquired.