Shares jump 13% after reorganizing statement

Follows course 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, comments from market insiders and experts, 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 organizations such as CNN from streaming and studio operations such as Max, preparing for a potential sale or spinoff of its TV company as more cable television customers cut the cable.

Shares of Warner jumped after the business said the 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 companies are considering choices for fading cable television businesses, a longtime money cow where revenues are deteriorating as millions of consumers welcome streaming video.

Comcast last month revealed strategies to divide most of its NBCUniversal cable television networks into a brand-new public business. The brand-new business would be well capitalized and placed to obtain other cable networks if the industry combines, one source informed Reuters.

Bank of America research analyst Jessica Reif Ehrlich composed that Warner Bros Discovery's cable television service properties are a "extremely rational partner" for Comcast's brand-new spin-off company.

"We strongly believe there is capacity for relatively sizable synergies if WBD's linear networks were integrated with Comcast SpinCo," wrote Ehrlich, utilizing the market term for standard tv.

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

Under the new structure for Warner Bros Discovery, the cable television TV business 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 behavior," said Jonathan Miller, president of digital media investment firm Integrated Media. "Now, it's winning as a company."

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's brand-new business structure will distinguish growing studio and streaming possessions from rewarding however shrinking cable company, giving a clearer financial investment picture and likely setting the stage for a sale or spin-off of the cable television system.

The media veteran and adviser forecasted Paramount and others may 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 positioning the company for its next chess move, wrote MoffettNathanson expert Robert Fishman.

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

Zaslav indicated 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, unlocking to media industry combination.

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

Others injected a note of caution, keeping in mind Warner Bros Discovery brings $40.4 billion in financial obligation.

"The structure change would make it much easier for WBD to sell off its direct TV networks," eMarketer expert Ross Benes said, referring to the cable service. "However, finding a purchaser will be challenging. The networks owe money and have no indications of development."

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

Today, the media business announced a multi-year offer increasing the overall costs Comcast will pay to distribute Warner Bros Discovery's networks.

Warner Bros Discovery is sports betting the Comcast arrangement, together with a deal reached this year with cable television and broadband provider Charter, will be a template for future settlements with suppliers. That might help support pricing 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)