Shares dive 13% after restructuring statement

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

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Challenges seen in selling debt-laden linear TV networks

(New throughout, adds details, background, comments from industry insiders and experts, updates share prices)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday chose to separate its declining cable organizations such as CNN from streaming and studio operations such as Max, laying the foundation for a potential sale or spinoff of its TV service as more cable television customers cut the cord.

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

Media business are considering options for fading cable services, a long time money cow where revenues are wearing down as countless consumers welcome streaming video.

Comcast last month unveiled plans to divide most of its NBCUniversal cable television networks into a brand-new public company. The brand-new company would be well capitalized and positioned to obtain other cable television networks if the industry combines, one source told Reuters.

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

"We highly think there is capacity for relatively large synergies if WBD's linear networks were integrated with Comcast SpinCo," wrote Ehrlich, using the industry term for conventional tv.

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

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

Streaming platforms Max and Discovery+ will be under a separate division along with film studios, consisting of Warner Bros Pictures and New Line Cinema.

The restructuring shows an inflection point for the media industry, as financial investments in streaming services such as Warner Bros Discovery's Max are finally settling.

"Streaming won as a habits," stated Jonathan Miller, primary executive of digital media investment firm Integrated Media. "Now, it's winning as a company."

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's new business structure will distinguish growing studio and streaming assets from successful however shrinking cable television service, giving a clearer investment image and likely setting the stage for a sale or spin-off of the cable television unit.

The media veteran and adviser predicted Paramount and others may take a similar course.

CEO David Zaslav, a veteran deal-maker who led Discovery through its acquisition of Scripps Networks Interactive before acquiring the even larger target, AT&T's WarnerMedia, is positioning 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 debt consolidation will take place-- it is a matter of who is the purchaser and who is the seller," wrote Fishman.

Zaslav indicated that scenario during Warner Bros Discovery's financier call last month. He stated he anticipated President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media market consolidation.

Zaslav had actually taken part in merger talks with Paramount late last year, though an offer never materialized, according to a regulative filing last month.

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

"The structure modification would make it simpler for WBD to sell its linear TV networks," eMarketer analyst Ross Benes stated, describing the cable company. "However, finding a buyer will be tough. The networks are in financial obligation and have no signs of growth."

In August, Warner Bros Discovery jotted down the value of its TV assets by over $9 billion due to unpredictability around fees from cable television and satellite suppliers and sports betting rights renewals.

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

Warner Bros Discovery is wagering the Comcast arrangement, together with an offer reached this year with cable television and broadband supplier Charter, will be a design template for future settlements with suppliers. That could assist support pricing 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)