Shares dive 13% after restructuring announcement

Follows course taken by Comcast's new spin-off business

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Challenges seen in selling debt-laden direct TV networks

(New throughout, adds details, background, comments from market experts and analysts, updates share rates)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday decided to separate its decreasing cable television companies such as CNN from streaming and studio operations such as Max, laying the groundwork for a prospective sale or spinoff of its TV business as more cable subscribers cut the cable.

Shares of Warner jumped after the business stated the new structure would be more deal friendly and it anticipated to finish the split by the middle of 2025. Warner shares closed at $12.49, up more than 15%.

Media business are thinking about alternatives for fading cable television companies, a longtime cash cow where earnings are eroding as millions of customers embrace streaming video.

Comcast last month unveiled strategies to split most of its NBCUniversal cable networks into a brand-new public company. The new company would be well capitalized and placed to get other cable television networks if the market consolidates, one source informed Reuters.

Bank of America research study analyst Jessica Reif Ehrlich wrote that Warner Bros Discovery's cable tv properties are a "really logical partner" for Comcast's new spin-off business.

"We highly think there is capacity for fairly substantial synergies if WBD's linear networks were integrated with Comcast SpinCo," wrote Ehrlich, utilizing the industry term for conventional television.

"Further, our company believe WBD's standalone streaming and studio possessions would be an attractive takeover target."

Under the brand-new structure for Warner Bros Discovery, the cable organization including TNT, Animal Planet and CNN will be housed in an unit called Global Linear Networks.

Streaming platforms Max and Discovery+ will be under a separate department in addition to film studios, including Warner Bros Pictures and New Line Cinema.

The restructuring shows an inflection point for the media market, as investments in streaming services such as Warner Bros Discovery's Max are lastly paying off.

"Streaming won as a behavior," stated Jonathan Miller, president of digital media financial investment business Integrated Media. "Now, it's winning as a company."

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's new business structure will differentiate growing studio and streaming properties from profitable however diminishing cable television business, providing a clearer investment image and likely setting the phase for a sale or spin-off of the cable television unit.

The media veteran and adviser anticipated Paramount and others might take a comparable course.

CEO David Zaslav, a veteran deal-maker who led Discovery through its acquisition of Scripps Networks Interactive before obtaining the even bigger target, AT&T's WarnerMedia, is placing the business for its next chess relocation, wrote MoffettNathanson expert Robert Fishman.

"The concern is not whether more pieces will be moved around or knocked off the board, or if more consolidation will take place-- it is a matter of who is the buyer and who is the seller," composed Fishman.

Zaslav signaled that situation during Warner Bros Discovery's investor call last month. He stated he prepared for President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to media industry combination.

Zaslav had participated in merger talks with Paramount late in 2015, though an offer never ever materialized, according to a regulatory filing last month.

Others injected a note of care, noting Warner Bros Discovery brings $40.4 billion in financial obligation.

"The structure change would make it easier for WBD to sell its direct TV networks," eMarketer expert Ross Benes stated, describing the cable television TV organization. "However, finding a purchaser will be tough. The networks owe money and have no signs of growth."

In August, Warner Bros Discovery composed down the value of its TV properties by over $9 billion due to uncertainty around costs from cable television and satellite suppliers and sports betting rights renewals.

This week, the media business revealed a multi-year offer increasing the overall charges Comcast will pay to distribute Warner Bros Discovery's networks.

Warner Bros Discovery is wagering the Comcast contract, together with an offer reached this year with cable and broadband service provider Charter, will be a design template for future settlements with suppliers. That might help stabilize rates for the domestic pay TV market. (Reporting by Deborah Sophia and Aditya Soni in Bengaluru, Dawn Chmielewski in Los Angeles; Editing by Shilpi Majumdar, Arun Koyyur, Keith Weir and David Gregorio)