Shares jump 13% after reorganizing announcement

Follows path taken by Comcast's brand-new spin-off company

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Challenges seen in offering debt-laden direct TV networks

(New throughout, adds details, background, remarks from industry insiders and analysts, updates share prices)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday chose to separate its decreasing cable television TV services such as CNN from streaming and studio operations such as Max, preparing for a potential sale or spinoff of its TV organization as more cable television subscribers cut the cable.

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

Media business are considering alternatives for fading cable organizations, a long time money cow where revenues are eroding as millions of customers welcome streaming video.

Comcast last month unveiled strategies to split most of its NBCUniversal cable networks into a brand-new public company. The brand-new company would be well capitalized and placed to acquire other cable networks if the market consolidates, one source told Reuters.

Bank of America research study expert Jessica Reif Ehrlich composed that Warner Bros Discovery's cable tv possessions are a "very logical partner" for Comcast's new spin-off business.

"We strongly think there is potential for relatively large synergies if WBD's direct networks were combined with Comcast SpinCo," wrote Ehrlich, using the industry term for traditional television.

"Further, our company believe WBD's standalone streaming and studio properties would be an appealing takeover target."

Under the brand-new structure for Warner Bros Discovery, the cable television TV business consisting of 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 market, as financial investments in streaming services such as Warner Bros Discovery's Max are lastly settling.

"Streaming won as a habits," said Jonathan Miller, primary executive of digital media financial investment company Integrated Media. "Now, it's winning as a business."

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's new corporate structure will separate growing studio and streaming properties from lucrative but diminishing cable television TV company, offering a clearer financial investment photo and most likely setting the phase for a sale or spin-off of the cable unit.

The media veteran and adviser anticipated Paramount and others might take a similar path.

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

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

Zaslav signified that scenario throughout Warner Bros Discovery's investor call last month. He said he prepared for President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to media market debt consolidation.

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

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

"The structure change would make it easier for WBD to offer off its direct TV networks," eMarketer expert Ross Benes stated, describing the cable television company. "However, discovering a buyer will be difficult. The networks are in financial obligation and have no signs of development."

In August, Warner Bros Discovery documented the value of its TV possessions by over $9 billion due to unpredictability around fees from cable television and satellite suppliers and sports betting rights renewals.

Today, the media company announced a multi-year offer increasing the total costs Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is sports betting the Comcast agreement, together with an offer reached this year with cable and broadband service provider Charter, will be a design template for future negotiations with suppliers. That could assist stabilize rates 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)