Warner Bros. Discovery, the parent company of HBO Max, CNN and TNT, announced Monday it would split into two companies by the middle of next year, the latest move by a major media conglomerate to reckon with a fracturing audience landscape.
The split will see one company house Warner's studios and streaming units, which include HBO Max, the DC Comics universe, and film production and distribution. That group will be led by WBD CEO David Zaslav. The other will comprise WBD's TV networks, such as CNN and Discovery, and will be led by Chief Financial Officer Gunnar Wiedenfels. That company will also take on most of WBD's existing debt.
“By operating as two distinct and optimized 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,” Zaslav said in a statement.
The move is likely to trigger a fresh wave of deal-making and consolidation in the legacy TV industry, which has been hammered by cord-cutting from cable customers who are shifting more to streaming and social video platforms like TikTok.
WBD’s decision echoes Comcast's announcement late last year stating it was spinning off its cable networks, including CNBC, MSNBC, E!, Syfy, Golf Channel, USA and Oxygen. That new company is set to be called Versant. Comcast owns NBCUniversal, the parent company of NBC News.
The news confirms earlier reporting that had indicated WBD was heading toward such a split, as Zaslav looked to reset the company's finances. In December, the company announced restructuring that many saw as a precursor to a full break.
Zaslav has experienced a turbulent time atop WBD, which was formed in 2022. Within months of the conglomerate's official launch, he was already addressing speculation that it was pursuing a sale. He has also taken flak for shelving nearly finished movie projects and ending Chris Licht's tenure as CNN chairman and CEO after just one year.
Wall Street has pummeled WBD's shares, which have fallen by some 60% since Zaslav was named head of the company. Its stock jumped 11% in Monday trading following news of the coming split.
In a recent note to clients, Bank of America analysts said WBD was "not working as a publicly traded entity" and that "transformative changes" were likely needed despite what they called the "tremendous value" of WBD's core media properties.
Zaslav, in a call with investors Monday morning, said the company would consider where to house WBD’s streaming sports efforts, noting they have not been a “driver” for their current home on HBO Max. WBD recently lost the rights to the NBA to NBCUniversal and Amazon's Prime Video.
Source: NBC News
