Warner Bros. Discovery (WBD) has revealed plans to divide its business into two separate public companies in an effort to address its ongoing financial challenges.
The decision was made public on Monday.
The big picture: The first entity, Streaming and Studios, will encompass Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, and HBO Max, focusing on streaming and studio operations.
- The second company, Global Networks, will encompass WBD’s worldwide entertainment, sports, and news television brands, including CNN, TNT Sports, and Discovery.
- This move follows significant financial setbacks for WBD in recent quarters, particularly in its linear broadcast television assets, as it redirects substantial investments into streaming platforms and digital content offerings.
What they’re saying: In a statement on Monday, David Zaslav, WBD’s top executive, indicated that the split is imperative for the interests of the company’s shareholders and hinted at further operational changes.
- “By operating as two distinct and optimized companies in the future, we are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today’s evolving media landscape,” Zaslav said.
Zoom in; WBD was formed in 2022 through the merger of Warner Bros. and Discovery in a deal valued at over $40 billion, sparking significant industry-wide transformations in news, sports, and entertainment.
- Since the merger, WBD, like many other media giants, has encountered financial challenges due to declining advertising revenue in broadcast television and subscriber attrition as more consumers shift from cable to streaming platforms.
- The company recently missed out on securing the latest round of broadcast rights for NBA games and earlier in the year announced the rebranding of its streaming service MAX to HBO Max.
- The announced split is expected to be finalized by the conclusion of 2026.
