Warner Bros. Discovery is saying That’s all, folks.
On Monday, the media and entertainment conglomerate announced that it would break into two separate companies, one for its cable TV networks and the other for its streaming services and studio business. The split is expected to complete sometime next year, and each company will be publicly traded.
In effect, the breakup will separate WBD’s flagship streaming service, HBO Max, along with its movie and television production operations, from its cable networks and news offerings, which include CNN, TNT, and many other networks.
When it’s all said and done, the separation will more or less undo the merger between Warner and Discovery that occurred in 2022, when WarnerMedia was spun off from the mobile and wireless giant AT&T.
Here’s how it’ll all break down once the dust settles in 2026:
Global Networks
“Global Networks,” as company management refers to it, will include many of WBD’s entertainment, news, and sports brands.
That includes TV networks like CNN, Discovery, and TNT Sports in the United States. But there will be differences depending on international regions and countries, and depending on specific rights agreements.
Global Networks will also house Bleacher Report and certain digital products, like the Discovery+ streaming service.
Gunnar Wiedenfels, WBD’s current CFO, will become the president and CEO of Global Networks.
Streaming and Studios
“Streaming and Studios” will become the home of the company’s development and production assets, and more. It will include Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, HBO Max, and their respective film and television libraries.
David Zaslav, WBD’s current CEO, will remain CEO of WBD Streaming & Studios.
What have WBD’s executives said about this split?
During a conference call on Monday morning, Zaslav said “we’re focusing on the next stage of transformation” of WBD, and that the separation will “allow each of these strong companies to achieve their maximum potential.”
“Each company will have its own dedicated management team and board,” Zaslav said, with “unique objectives and priorities.”
He added that “we expect all the factors to come together to unlock value—these companies will be better aligned with shareholders.”
Wiedenfels, joining Zaslav on the call, said that “the whole concept of the separation is to create two strong and well positioned companies—we feel very confident about the compelling nature about both portfolios,” adding that he saw the separation as “a natural progression of WBD.”
What does this mean for shareholders?
Both companies will be publicly traded. Moreover, the global networks business will hold up to a 20% retained stake in the streaming business.
In the short term, Warner Bros Discovery stock (Nasdaq: WBD) was up about 7.59% in late-morning trading on Monday after the announcement. But the stock is flat year to date. Last week, shareholders voted to reject pay packages for top executives including Zaslav, although the vote was largely symbolic.
WBD, since its merger a few years ago, has struggled with debt, rounds of layoffs and rebranding. (Notably, HBO Go became HBO Max, then Max, and is now back to HBO Max again). But Zaslav sounds upbeat about the future, and said the two companies coexisting should help each prosper.
“When we put these businesses together in the last three years, we built them out, and we paid down debt,” Zaslav said. “We believe [the separation] gives us a lot more flexibility in the future.”
