Warner Bros rises 10% on plans to split into two firms

Warner Bros rises 10% on plans to split into two firms

Warner Bros. Discovery (WBD) has announced plans to split into two separate publicly traded companies, with the stock rising 10% on the news. The company, which owns iconic brands such as HBO, CNN, and TNT, aims to enhance strategic focus and flexibility by separating its streaming and studios business from its traditional television networks. This move comes amidst growing pressure on media conglomerates to adapt to the evolving media landscape and capitalize on the streaming boom.

The streaming and studios business, to be led by CEO David Zaslav, will include HBO Max, Warner Bros. Pictures, and DC Studios. The traditional television networks, including CNN, TNT, and Discovery, will operate under the banner of Global Networks, with Gunnar Wiedenfels serving as CEO. The split is expected to be completed by mid-2026.

The announcement has been well-received by investors, with the stock rising 10% to $13.38, according to the latest analyst price targets [5]. The move is seen as a strategic shift to attract investors in the company's growing streaming business without exposing them to the declining traditional TV business.

Warner Bros. Discovery is not the first media conglomerate to opt for a split. Comcast is also in the process of spinning off its cable TV networks into a new company called Versant [3]. The split will align Warner Bros. Discovery with Comcast's strategy of focusing on streaming and digital assets.

The media industry is currently undergoing significant disruption, with millions of subscribers abandoning cable TV in favor of streaming services. This has put pressure on companies to consistently produce hit studio content and boost profitability in their streaming businesses [4]. Warner Bros. Discovery has been preparing for this shift by internally restructuring its assets and exploring a spinoff [2].

The split is expected to enhance the company's operational efficiency and unlock greater value for shareholders. However, there are challenges to consider, such as the uncertainty around the leverage ratio that global linear networks can handle and the potential impact on sports rights [5].

References:
[1] https://finance.yahoo.com/news/warner-bros-discovery-split-two-131928380.html
[2] https://awfulannouncing.com/warner-bros-discovery/wbd-split-two-companies-streaming-linear.html
[3] https://www.newsmax.com/finance/streettalk/warner-brothers-discovery/2025/06/09/id/1214109/
[4] https://www.mediaite.com/media/tv/breaking-warner-bros-discovery-to-split-into-two-separate-companies/
[5] https://www.gurufocus.com/news/2914995/warner-bros-discovery-wbd-to-split-into-two-public-companies-wbd-stock-news