Warner Bros. Discovery to Split in Two: HBO and CNN Headed for Separate Companies

Warner Bros. Discovery (NASDAQ: WBD) announced a bold restructuring plan Monday, unveiling its intent to split the company into two independent, publicly traded entities. The move, expected to be completed by mid-2026, will create a focused Streaming & Studios company, home to marquee assets like HBO, Warner Bros. Pictures, and DC Studios, and a Global Networks business that will house CNN, TNT Sports, Discovery, and the profitable Discovery+ platform. Shares of WBD surged 10% on the news but are approaching technical resistance around the $11 mark, a key level to watch in coming sessions.

Under the separation plan, CEO David Zaslav will lead the Streaming & Studios unit, while current CFO Gunnar Wiedenfels will become CEO of Global Networks. Both executives will remain in their current roles until the separation is finalized. The split reflects a growing industry trend, as legacy media companies adjust to the rapid decline of linear television and the persistent pressure to streamline operations for a digital-first era. The move echoes similar steps by rivals like Comcast, which is spinning off NBCUniversal cable properties into a separate company called Versant.

The Streaming & Studios division will include Warner Bros. Television, Warner Bros. Motion Picture Group, HBO, HBO Max, DC Studios, Warner Bros. Games, and related production assets. This unit aims to capitalize on its robust content library and global reach, with HBO Max now available in 77 markets and additional launches planned in 2026. Warner is targeting $3 billion in annual adjusted EBITDA for this segment, fueled by continued investment in premium programming and efforts to grow its global streaming footprint. Zaslav called the company “one of the world’s greatest storytelling companies” and emphasized that the split will allow it to pursue opportunities “with sharper focus and strategic flexibility.”

Global Networks will consist of Warner’s vast cable portfolio, including CNN, TNT, Discovery Channel, and other international linear TV brands. It will also house digital assets like Discovery+ and Bleacher Report. Despite the structural decline in pay-TV, this unit continues to generate steady free cash flow and enjoys strong international scale, with content in 68 languages across 200 markets. Global Networks will also retain up to a 20% stake in the Streaming & Studios entity, which it plans to monetize to accelerate debt reduction.

And that debt question looms large. WBD entered this split with a roughly $34 billion debt load. A new $17.5 billion bridge loan secured from J.P. Morgan will help facilitate the transition, with both new companies expected to issue their own debt post-split to refinance that facility. Global Networks, which brings in more revenue and stronger cash flows, will shoulder the majority of the existing debt, allowing Streaming & Studios to pursue growth with a cleaner balance sheet. While WBD has emphasized that both companies will be well-capitalized and positioned to de-lever, credit markets may remain cautious—especially after S&P Global Ratings downgraded the company’s debt to junk earlier this month.

In practical terms, the separation will unwind much of the 2022 WarnerMedia-Discovery merger, which was heralded as a transformational deal but has since faced investor skepticism and steep share price losses. Zaslav’s tenure has been marked by cost-cutting, layoffs, and strategic pivots, but investor frustration has grown. Just last week, more than half of shareholders voted against his $51.9 million compensation package in a non-binding rebuke. The decision to break up the company could serve as a reset—an attempt to restore investor confidence and unlock value from businesses with diverging futures.

One unresolved detail is whether the two units will trade under separate tickers, although that is the expectation. Final decisions regarding capital structure, share distribution, and other mechanics will be determined closer to the split, pending regulatory and board approvals.

The market reaction has been positive, with Monday’s 10% rally suggesting some degree of investor approval. Still, with the stock facing resistance near $11 and sentiment still mixed, execution risk remains high. Investors will closely watch how the debt is apportioned and how each entity positions itself for growth amid intense industry disruption.

With a shifting media landscape and increasing calls for strategic clarity, Warner Bros. Discovery is betting that two focused companies can succeed where one sprawling conglomerate has struggled. Whether this move revitalizes shareholder value or simply marks another chapter in media’s long consolidation saga remains to be seen.