Shares jump 13% after restructuring statement

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

*

Challenges seen in selling debt-laden direct TV networks

(New throughout, includes information, background, comments from industry insiders and analysts, updates share prices)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

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

Shares of Warner leapt after the business stated the brand-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 businesses, a long time golden goose where profits are wearing down as countless consumers accept streaming video.

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

Bank of America research expert Jessica Reif Ehrlich wrote that Warner Bros Discovery's cable tv assets are a "extremely sensible partner" for Comcast's brand-new spin-off business.

"We highly believe there is capacity for fairly sizable synergies if WBD's linear networks were integrated with Comcast SpinCo," wrote Ehrlich, using the market term for traditional television.

"Further, we believe WBD's standalone streaming and studio assets would be an attractive takeover target."

Under the brand-new structure for Warner Bros Discovery, the cable television TV company consisting of 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 division in addition to movie studios, including Warner Bros Pictures and New Line Cinema.

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

"Streaming won as a habits," said Jonathan Miller, president of digital media investment firm Integrated Media. "Now, it's winning as an organization."

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

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

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 positioning the company 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 further debt consolidation will occur-- it is a matter of who is the buyer and who is the seller," wrote Fishman.

Zaslav indicated that situation throughout Warner Bros Discovery's financier call last month. He said he prepared for President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to media industry consolidation.

Zaslav had actually taken part in merger talks with Paramount late in 2015, though an offer never materialized, according to a regulative filing last month.

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

"The structure modification would make it easier for WBD to sell off its direct TV networks," eMarketer analyst Ross Benes said, describing the cable television organization. "However, discovering a buyer will be tough. The networks are in financial obligation and have no indications of growth."

In August, Warner Bros Discovery documented the value of its TV assets by over $9 billion due to unpredictability around costs from cable and satellite distributors and sports betting rights renewals.

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

Warner Bros Discovery is sports betting the Comcast agreement, together with an offer reached this year with cable and broadband supplier Charter, will be a template for future negotiations with distributors. That could assist stabilize 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)