This week, Warner Bros. Discovery announced plans for a significant restructuring, combining its streaming and studio operations into a single business unit. Currently, the media company is organized into three separate divisions: streaming, film and television studios, and traditional cable networks.
Only two groups would remain after the reorganization is complete in mid-2025. The proposal was well received by Wall Street, with the company’s share price rising sharply after the announcement. Some believe that this will allow the company to pursue “strategic opportunities,” selling off its cable business to the highest bidder.
For now, Warner will keep control of its cable stations, which account for a significant portion of the company’s profits – $15.4 billion over the first nine months of 2024. By contrast, Comcast announced in November its plans to spin off the majority of its cable channels into a new, stand-alone company.
Comcast may have more flexibility than Warner to carve out its cable channels from the overall company since it generates significant profits from its broadband and phone businesses. The entire industry is taking steps to manage the long-term decline of cable, which is leading to a significant reshuffling of assets.
Comcast’s new cable company has been floated as a potential suitor for Warner’s cable business. Any combination will have to wait until both company’s announced restructurings are completed in 2025.