Shares jump 13% after reorganizing statement

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

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Challenges seen in offering debt-laden direct TV networks

(New throughout, adds information, background, comments from market experts and analysts, updates share costs)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

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

Shares of Warner leapt after the business stated the new structure would be more deal friendly and it expected to complete 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 TV businesses, a long time golden goose where profits are deteriorating as millions of consumers welcome streaming video.

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

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

"We strongly think there is potential for relatively substantial synergies if WBD's linear networks were integrated with Comcast SpinCo," composed Ehrlich, using the market term for traditional tv.

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

Under the new structure for Warner Bros Discovery, the cable 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 department in addition to movie studios, consisting of 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 finally settling.

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

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's brand-new business structure will distinguish growing studio and streaming assets from profitable but diminishing cable TV organization, offering a clearer financial investment picture and likely setting the phase for a sale or spin-off of the cable system.

The media veteran and advisor forecasted 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 acquiring the even larger target, AT&T's WarnerMedia, is placing the company for its next chess move, wrote MoffettNathanson expert Robert Fishman.

"The question is not whether more pieces will be moved around or knocked off the board, or if additional debt consolidation will happen-- it refers who is the buyer and who is the seller," composed Fishman.

Zaslav indicated that scenario throughout 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, unlocking to media market consolidation.

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

Others injected a note of caution, noting Warner Bros Discovery brings $40.4 billion in debt.

"The structure change would make it much easier for WBD to sell off its direct TV networks," eMarketer expert Ross Benes said, describing the cable television TV service. "However, finding a purchaser will be challenging. The networks owe money and have no signs of development."

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

This week, the media company revealed a multi-year offer increasing the general 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 company Charter, will be a design template for future negotiations with distributors. That might 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)