Shares jump 13% after restructuring statement

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

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Challenges seen in selling debt-laden linear TV networks

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

Shares of Warner leapt after the business stated the new structure would be more deal friendly and it expected to finish 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 services, a longtime cash cow where revenues are wearing down as millions of consumers accept streaming video.

Comcast last month revealed plans to divide 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 television networks if the market combines, one source told Reuters.

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

"We highly believe there is potential for fairly substantial synergies if WBD's direct networks were integrated with Comcast SpinCo," composed Ehrlich, using the market term for traditional tv.

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

Under the brand-new structure for Warner Bros Discovery, the cable television service 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 department 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 settling.

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

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's new corporate structure will differentiate growing studio and streaming assets from profitable however shrinking cable company, giving a clearer financial investment image and likely setting the stage for a sale or spin-off of the cable television unit.

The media veteran and consultant predicted 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, composed MoffettNathanson expert Robert Fishman.

"The concern is not whether more pieces will be walked around or knocked off the board, or if additional combination will take place-- it refers who is the purchaser and who is the seller," composed Fishman.

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

Zaslav had taken part in merger talks with Paramount late last year, though an offer never ever 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 change would make it simpler for WBD to offer off its direct TV networks," eMarketer analyst Ross Benes said, referring to the cable organization. "However, discovering a buyer will be challenging. The networks owe money and have no indications of growth."

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

Today, the media company revealed a multi-year offer increasing the overall fees Comcast will pay to distribute Warner Bros Discovery's networks.

Warner Bros Discovery is wagering the Comcast contract, together with a deal reached this year with cable and broadband supplier Charter, will be a template for future negotiations with suppliers. That could assist 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)