Warner Bros. Discovery to spinoff cable networks
Splits company into two; aims to complete by mid-2026
Warner Bros. Discovery announced on Monday that it will separate the conglomerate into two separately publicly traded companies.
Speculated for some time, the move will separate its streaming and studios business from its cable networks, making it a stand-alone company. One company (temporarily named “Streaming and Studios”) will house Warner Bros.’ film studio business, television operations, HBO, and recently renamed streamer HBO Max, led by current WBD CEO David Zaslav. The other will house WBD’s cable networks, such as CNN, TNT, TBS, and Discovery, known for now as “Global Networks” and run by current Warner CFO Gunnar Wiedenfels. The process is expected to take a year.
“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,” said Zaslav in a press release.
WBD’s split follows NBCUniversal’s announcement earlier this year to spin off its cable networks to a separate company named Versant. In both cases, the cable networks are being spun off due to a lack of growth from cord-cutting.
This is the latest chapter in Warner Bros.’ evolution as a media company. Warner Bros. merged with Time, Inc. to form TimeWarner in 1989. It purchased Atlanta-based Turner Communications in 1995, then added AOL (America Online) at the dawn of the internet era. AT&T merged with TimeWarner in 2016, but spun off the unit in 2021 and merged with Discovery Communications to form Warner Bros. Discovery.
The WBD era has been rough as the company has been criticized for inept management under Zaslav’s reign. When the NBA’s musical chairs were taking place regarding new rights deals, WBD was left without a seat when the music stopped as the league made $76 billion worth of deals with NBCU, Disney, and Amazon.
The future of sports on “Global Networks” is in question. During a conference call, Zaslav stated that recent sports rights acquisitions have not led to an increase in HBO Max subscriptions. He indicated that it would be up to Wiedenfels to decide whether he wanted to license the content to Streaming and Studios or another entity.
“Inside the U.S., sports have been less critical,” Zaslav said on the same conference call. “It’s viewed, but it hasn’t been a real driver for us. So it will continue to be on HBO Max, but the Global Networks business will evaluate over time where the best place for that is.” One possibility is that the newly spun-off Warner Bros. unit may merge with Versant, as CEO Mark Lazarus has expressed interest in acquiring more sports rights once the NBCU spinoff is complete.