Warner Bros. Discovery to split streaming and cable into two publicly traded companies
Warner Bros. Discovery separates HBO Max and CNN; Global Networks to hold $34B debt and 20% stake in Studios.

Warner Bros. Discovery has stated that splitting the company into two independently traded companies is the best way to separate the streaming and studio assets from their cable networks. Clearly, the performance of their stock and the speculation of the massive debt burden of 34 billion dollars has gotten the attention of all the 'suit' and 'tie' individuals on Wall Street. There is risk involved in trading companies, but it is nice to know that their assets will help recover the debt.
Going forward, the separation will be the Streaming & Studios – HBO Max, Warner Bros. Pictures and TV production, separated from the other 50% of the business known as 'Global Networks' - CNN, TNT, TBS and Discovery's international and non-fiction programming. Global Networks will keep a 20% interest in Streaming & Studios and will use distributions to paydown Global Networks debt portion.
Strategic move to unlock shareholder value
The reorganization reverses the merger of the Warner Media and Discovery Communications companies in 2022. Executives hope that the separation would give each group more flexibility to adapt to the changing media landscape and competition from digital-native brands such as Netflix and Amazon Prime Video.
Warner CEO David Zaslav is now the CEO of the Streaming & Studios company, and CFO Gunnar Wiedenfels is now in charge of Global Networks. Zaslav said that separating the companies will sharpen their strategic focus across the brands and be a more competitive force in the marketplace. However, Warner’s shareholders are upset! More than 59% voted against Zaslav’s 2024 compensation package of $51.9 million dollars.

Warner Bros. Discovery will offer cable programs separately from streaming services. Photo: Reddit

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Debt Allocation and revenue challenges
Of the $57 billion in debt Warner has on the books, most of that will move over to Global Networks in the transition to the new structure. Global Networks will also control Discovery+, CNN's new streaming service, and U.S. sports assets like Bleacher Report. Cable, even with a 6% decline year-over-year, remains the largest revenue earner for Warner.
Subsequently, Warner obtained a $17.5 billion bridge credit facility from J.P. Morgan, and Warner will pay the credit facility back preferably via incremental new debt issued by the separated companies. Wiedenfels further explained that this kind of structure will allow both entities to focus on growth, core competencies, and merger and acquisitions opportunities within their own sectors.