Warner Bros Discovery confirms separation into two media companies
Warner Bros Discovery (WBD) has announced plans to separate the company into two publicly traded companies: Streaming & Studios and Global Networks.
Following the long-rumoured move, Streaming & Studios will comprise Warner Bros Television, Warner Bros Motion Picture Group, DC Studios, HBO and streaming service HBO Max, as well as their film and television libraries. Warner Bros Games, Tours, Retail and Experiences, as well as studio production facilities in Burbank and Leavesden, are also included.
The company’s linear television networks will be spun off into a Global Networks arm which will include entertainment, sports and news television brands including CNN, TNT Sports in the US, and Discovery, free-to-air channels across Europe and digital products such as the Discovery+ streaming service and Bleacher Report.
Warner Bros Discovery says it intends to separate the businesses in a tax-free manner for US federal income tax purposes. The separation is expected to be completed by mid-2026, subject to closing and other conditions, including final approval by the Warner Bros Discovery board
David Zaslav, president and CEO of Warner Bros Discovery, will serve as president and CEO of Streaming & Studios. Gunnar Wiedenfels, chief financial officer of Warner Bros. Discovery, will serve as president and CEO of Global Networks. Both will continue in their present roles at WBD until the separation.
Zaslav said: “The cultural significance of this great company and the impactful stories it has brought to life for more than a century have touched countless people all over the world. It’s a treasured legacy we will proudly continue in this next chapter of our celebrated history.
“By operating as two distinct and optimised companies in the future, we are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today’s evolving media landscape.”
Wiedenfels added: “This separation will invigorate each company by enabling them to leverage their strengths and specific financial profiles. This will also allow each company to pursue important investment opportunities and drive shareholder value.
“At Global Networks, we will focus on further identifying innovative ways to work with distribution partners to create value for both linear and streaming viewers globally while maximising our network assets and driving free cash flow.”
The 2021/22 merger between WarnerMedia and US factual giant Discovery was a difficult one, resulting in widespread lay-offs of some of the business’s best known execs and a long-running commissioning hiatus that threatened to cripple the unscripted indie sector in the US.
The resulting behemoth company’s financial performance has struggled. In May, ratings agency S&P downgraded WBD to ‘junk’ BB+ status amid continued revenue and cash flow declines at its linear TV operations.
“We committed to shareholders to identify the best strategy to realise the full value of our exciting portfolio of assets, and the board believes this transaction is a great outcome for WBD shareholders,” said Samuel A Di Piazza Jr, chair of the WBD board. “This announcement reflects the board’s ongoing efforts to evaluate and pursue opportunities that enhance shareholder value.”
