Shares dive 13% after reorganizing statement

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

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Challenges seen in selling debt-laden direct TV networks

(New throughout, includes information, 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 declining cable services such as CNN from streaming and studio operations such as Max, laying the foundation for a potential sale or spinoff of its TV company as more cable television subscribers cut the cord.

Shares of Warner jumped after the company stated 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 thinking about choices for fading cable businesses, a longtime golden goose where incomes are deteriorating as countless customers welcome streaming video.

Comcast last month revealed plans to divide most of its NBCUniversal cable television networks into a new public business. The brand-new business would be well capitalized and positioned to acquire other cable television networks if the market consolidates, one source told Reuters.

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

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

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

Under the new structure for Warner Bros Discovery, the cable TV business including TNT, Animal Planet and CNN will be housed in an unit called Global Linear Networks.

Streaming platforms Max and Discovery+ will be under a different division in addition to movie studios, including Warner Bros Pictures and New Line Cinema.

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

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

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's brand-new business structure will distinguish growing studio and streaming assets from profitable however shrinking cable television organization, giving a clearer financial investment picture and likely setting the phase for a sale or spin-off of the cable television unit.

The media veteran and advisor predicted Paramount and others might take a similar course.

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

"The concern is not whether more pieces will be walked around or knocked off the board, or if further combination will occur-- it is a matter of who is the buyer and who is the seller," composed Fishman.

Zaslav signified that circumstance during 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 industry consolidation.

Zaslav had actually engaged in merger talks with Paramount late in 2015, though a deal never materialized, according to a regulatory filing last month.

Others injected a note of care, keeping in mind Warner Bros Discovery brings $40.4 billion in debt.

"The structure change would make it much easier for WBD to sell off its linear TV networks," eMarketer expert Ross Benes stated, describing the cable TV company. "However, finding a buyer will be difficult. The networks owe money and have no indications of development."

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

Today, the media business revealed a multi-year offer increasing the general charges Comcast will pay to disperse 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 template for future negotiations with suppliers. That could help 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)