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Tag: Streaming & Studios

  • Blockbuster breakup as Warner Bros. Discovery plots a starry split

    Blockbuster breakup as Warner Bros. Discovery plots a starry split

    MUMBAI: When one studio door closes, another opens with a box-office bang. In a dramatic plot twist that rivals its biggest screen spectacles, Warner Bros. Discovery (WBD) is pressing play on a two-part sequel splitting into two publicly traded companies to give each unit its moment in the spotlight. Announced today, the tax-free separation will see WBD carve out Streaming & Studios home to HBO, DC Studios, Warner Bros. Pictures and Television, and HBO Max from Global Networks, which includes CNN, TNT Sports, Discovery, and Discovery+, as well as key linear and digital assets across 200 countries and 68 languages.

    David Zaslav, WBD’s current President and CEO, will lead Streaming & Studios, while Gunnar Wiedenfels, its CFO, will take charge of Global Networks. Both will retain their existing roles during the transition.

    “This move gives us the sharper focus and agility needed to thrive in today’s fast-evolving media universe,” Zaslav said, promising a future of creative excellence and strategic flexibility. Wiedenfels added that the split will allow “each company to leverage its strengths and financial profiles,” paving the way for innovation and shareholder value.

    Streaming & Studios will combine storytelling firepower and IP goldmines think Harry Potter, Game of Thrones, and Batman with global platform HBO Max, which currently operates in 77 markets and plans further expansion by 2026. WBD is aiming for 3 billion dollars in annual adjusted EBITDA from this division.

    Global Networks, meanwhile, commands a massive reach of 1.1 billion viewers, with an eye on live content growth, international opportunities, and monetising digital assets like B/R and CNN’s new streaming play. The unit boasts industry-leading margins and strong free cash flow.

    A crucial detail: Global Networks will retain up to 20 per cent stake in Streaming & Studios, planned to be monetised later for balance sheet de-leveraging.

    To support the split, WBD has secured a 17.5 billion dollars bridge facility from J.P. Morgan, which it expects to refinance before separation. Tender offers and consent solicitations have also been launched to optimise its debt structure.

    The full spin-off is targeted for mid-2026, pending board approvals, market conditions, and tax clearances from the IRS. J.P. Morgan and Evercore are advising, with Kirkland & Ellis as legal counsel.

    WBD Chair Samuel A. Di Piazza, Jr. framed the move as a win for shareholders: “This transaction is a great outcome, unlocking long-term value and strategic focus for two exceptional businesses.”

    The end credits may still be a year away, but WBD’s bold reboot is already setting the stage for a media double feature like no other. One company to power global fandoms, another to rule the airwaves all from the studio that gave us a century of storytelling magic.
     

  • Warner Bros Discovery announces restructure; cleaves into two divisions

    Warner Bros Discovery announces restructure; cleaves into two divisions

    MUMBAI: Following in the footsteps of other gorilla media companies trying to find a way to retain value in the face of the streaming tsunami, Warner Bros Discovery (WBD) announced on 12 December that it had got its board’s go ahead to cleave itself into two operating divisions, namely

    * Global Linear Networks: A premier linear television business that operates networks with compelling news, sports, scripted and unscripted programming.
    * Streaming & Studios: A globally scaled streaming platform and storied film and entertainment studios with a portfolio of intellectual property.

    WBD will serve as the parent company. The intent behind this corporate restructuring:  enhance its strategic flexibility and create potential opportunities to unlock additional shareholder value. Additionally, it  expects the new corporate structure to increase clarity and focus, with each division positioned to deliver on its specific strategic and operational objectives while executing on initiatives to further key priorities for the consolidated WBD. 

    Global linear networks will focus on maximising profitability and free cash flow to continue deleveraging, while streaming & studios will focus on driving growth and strong returns on increasing invested capital, said a corporate release. The latter will include streaming platforms Max and Discovery+  and film studios like Warner Bros Pictures and New Line Cinema.

    The new corporate structure will also increase optionality to pursue further value creation opportunities for both divisions in an evolving media landscape, the company statement added.. 

    What analysts are observing in this move, is the possibility of a spin off of the company’s legacy linear TV assets into a separate company as traditional cable TV and linear channels like TNT, Discovery, HLN, Animal Planet, CNN have been on a downward trajectory with cord-cutting rampant.  Last year , WBD  unveiled a $9.1 billion goodwill impairment charge to write down the value of its legacy TV assets. 

    Investors have been beating down the share prices of media companies which don’t have a clear runway for their streaming businesses.

    WBD president &  CEO, David Zaslav has been promising that he would ways to unlock better value for shareholders by strategic moves, as recently as a couple of months ago.

    Comcast beat Zaslav’s maneuvre by announcing plans to spin off its NBCUniversal cable TV networks, including channels like MSNBC, CNBC, and E! so that they would not be a drag on its core business which includes  residential broadband, wireless, business services and NBCUniversal’s streaming, studios and theme parks

    However, other observers say that WBD might find it challenging to do a spinoff in the near future as a lot of the cash coming into the company is via its linear television business, which is seeing declining subscribers. It struck a new multiyear distribution deal with Charter Communications and Comcast which included higher payouts to it by the two for its linear channels.   Its  D2C business is actually on a growth curve and has limited cash inflows as the streaming services expand globally.

    “Since the combination that created Warner Bros. Discovery, we have transformed our business and improved our financial position while providing world class entertainment to global audiences,” said Zaslav in a statement announcing the restructuring. “We continue to prioritize ensuring our global linear networks business is well positioned to continue to drive free cash flow, while our streaming & studios business focuses on driving growth by telling the world’s most compelling stories. Our new corporate structure better aligns our organisation and enhances our flexibility with potential future strategic opportunities across an evolving media landscape, help us build on our momentum and create opportunities as we evaluate all avenues to deliver significant shareholder value.”

    Warner Bros. Discovery expects to start the foundational steps immediately and to complete the implementation of the new corporate structure by mid-2025.In addition, the Company expects to continue to evolve the board to execute its strategy and drive future shareholder value creation. J.P. Morgan, Evercore, and Guggenheim Securities are serving as financial advisors to Warner Bros. Discovery and Kirkland & Ellis and Wachtell Lipton are serving as legal counsel.