Shares dive 13% after reorganizing announcement

Follows course taken by Comcast's new spin-off business

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Challenges seen in selling debt-laden direct TV networks

(New throughout, adds information, background, remarks from industry experts 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 declining cable companies 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 customers cut the cord.

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

Media business are thinking about choices for fading cable companies, a longtime golden goose where incomes are deteriorating as countless customers welcome streaming video.

Comcast last month revealed plans to split many of its NBCUniversal cable television networks into a new public company. The brand-new company would be well capitalized and placed to obtain other cable television networks if the market combines, one source informed Reuters.

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

"We highly believe there is potential for relatively sizable synergies if WBD's direct networks were integrated with Comcast SpinCo," wrote Ehrlich, using the industry term for standard television.

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

Under the new structure for Warner Bros Discovery, the cable service consisting of 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 department together with 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 finally settling.

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

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's new corporate structure will distinguish growing studio and streaming properties from profitable however diminishing cable television TV business, providing a clearer financial investment photo and 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 comparable path.

CEO David Zaslav, a veteran deal-maker who led Discovery through its acquisition of Scripps Networks Interactive before getting the even larger target, AT&T's WarnerMedia, is positioning the business for its next chess relocation, 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 take place-- it refers who is the buyer and who is the seller," wrote Fishman.

Zaslav indicated that situation 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, unlocking to media market consolidation.

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

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

"The structure modification would make it easier for WBD to offer off its linear TV networks," eMarketer expert Ross Benes said, referring to the cable business. "However, finding a purchaser will be challenging. The networks are in financial obligation and have no signs of development."

In August, Warner Bros Discovery made a note of the worth of its TV possessions by over $9 billion due to uncertainty around fees from cable television and satellite suppliers and sports betting rights renewals.

This week, the media company revealed a multi-year offer increasing the overall charges 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 supplier Charter, will be a template for future negotiations with distributors. That could 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)