Media giant to spin off into two separate public companies – one focused on streaming and studio production, the other on news, sports, and international entertainment networks

Warner Bros. Discovery (WBD), one of the world’s largest media conglomerates, has announced a major strategic move: a spin-off into two independent, publicly traded entities by mid-2026. The decision follows a period of structural challenges and declining revenues from traditional cable channels, amid the accelerating shift of consumers toward streaming and digital content.

According to the company’s official release, the spin-off will be executed as a tax-free transaction under U.S. law. The first new company, tentatively called Streaming & Studios, will consolidate Warner Bros. Pictures, HBO, the Max streaming platform, DC Studios, and physical content libraries. The second company, Global Networks, will include CNN, TNT Sports, Discovery+, Discovery’s international cable networks, and digital brands such as Bleacher Report.

Market Reaction: Stock up 21% in the Past Year

Investors welcomed the announcement. WBD shares have surged 20.94% over the past year, now trading at $9.82 as of June 9, 2025.

The annual chart shows high volatility: from a 52-week low of $6.64, the stock climbed to a yearly high of $12.70 in December 2024, likely driven by early rumors of restructuring. The stock later dipped to around $7.69 in April 2025, possibly due to operational uncertainty, but rebounded sharply afterward. The company’s current market capitalization stands at $24.3 billion, with a price-to-earnings (P/E) ratio of 10.03.

New Leadership, Sharpened Strategy

Current CEO and President David Zaslav will lead the Streaming & Studios division, while CFO Gunnar Wiedenfels is set to become CEO of the Global Networks entity. The aim is to grant each business arm operational independence, access to tailored capital structures, and strategic clarity.

“This is a unique opportunity to unlock value across our portfolio,” said Zaslav. “We believe two focused, financially healthy companies will be better positioned to respond to the evolving technological and consumer landscape of global media.”

Two Engines – Two Risk Profiles

Streaming & Studios is expected to house WBD’s premium content brands: HBO, Max, Warner Bros., and one of the industry’s largest content libraries. It is targeting an annual adjusted EBITDA of at least $3 billion. The unit aims to expand Max’s global reach (currently in 77 markets) and streamline content investments around proven IP like Harry Potter, DC, and Game of Thrones.

Global Networks, on the other hand, will leverage the strength of legacy cable brands in news and sports – reaching 1.1 billion unique viewers across 220 markets. It will focus on expanding digital distribution channels while maintaining strong cash flows and prudent debt management.

Financial Structure and Spin-Off Financing

To facilitate the spin-off, WBD secured $17.5 billion in bridge financing from JPMorgan to refinance and reallocate debt between the two units. Initially, Global Networks will retain up to 20% of Streaming & Studios shares and gradually divest them to enhance liquidity and reduce leverage.

Broader Context: Industry-Wide Realignment

WBD’s move is part of a wider industry trend: Comcast (CNBC’s parent company) recently spun off its cable division into a new company called Versant; Disney is reportedly considering similar actions; and Paramount is in merger talks with Sony and RedBird Capital. The entire media landscape is shifting toward a “segment-based” structure – where each audience-facing division has its own parent entity, capital model, and focused strategy.

Conclusion: Clarifying the Corporate Identity

WBD’s split is not just a reaction to declining cable revenues – it’s a forward-looking attempt to align with a new media era, one defined by focused content delivery and sustainable business models.

The market response indicates cautious optimism. If executed successfully, and if each standalone company is able to grow independently, this could become a template for the next generation of media conglomerates.