Shares jump 13% after restructuring announcement

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

*

Challenges seen in selling debt-laden linear TV networks

(New throughout, adds information, background, comments from industry insiders and experts, updates share rates)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

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

Shares of Warner jumped after the company stated the brand-new structure would be more deal friendly and it anticipated to complete the split by the middle of 2025. Warner shares closed at $12.49, up more than 15%.

Media business are considering alternatives for fading cable television TV companies, a long time money cow where incomes are wearing down as countless customers welcome streaming video.

Comcast last month revealed plans to split the majority of its NBCUniversal cable networks into a new public company. The new business would be well capitalized and placed to acquire other cable television networks if the market consolidates, one source informed Reuters.

Bank of America research analyst Jessica Reif Ehrlich composed that Warner Bros Discovery's cable tv properties are a "very rational partner" for Comcast's new spin-off business.

"We highly think there is capacity for relatively substantial synergies if WBD's linear networks were combined with Comcast SpinCo," wrote Ehrlich, utilizing the market term for conventional television.

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

Under the brand-new structure for Warner Bros Discovery, the cable service including 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, including Warner Bros Pictures and New Line Cinema.

The restructuring shows an inflection point for the media market, as investments in streaming services such as Warner Bros Discovery's Max are lastly paying off.

"Streaming won as a habits," said Jonathan Miller, president of digital media investment company Integrated Media. "Now, it's winning as a company."

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's new corporate structure will differentiate growing studio and streaming possessions from profitable but diminishing cable television company, providing a clearer investment picture and most likely setting the stage for a sale or spin-off of the cable unit.

The media veteran and advisor anticipated Paramount and others might take a similar course.

CEO David Zaslav, a veteran deal-maker who led Discovery through its acquisition of Scripps Networks Interactive before getting the even bigger target, AT&T's WarnerMedia, is placing the company for its next chess move, composed MoffettNathanson expert Robert Fishman.

"The concern is not whether more pieces will be moved or knocked off the board, or if further consolidation will happen-- it is a matter of who is the purchaser and who is the seller," wrote Fishman.

Zaslav signaled that situation during Warner Bros Discovery's investor call last month. He stated he expected President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to media market consolidation.

Zaslav had participated in merger talks with Paramount late in 2015, though an offer never emerged, according to a regulative filing last month.

Others injected a note of care, keeping in mind Warner Bros Discovery brings $40.4 billion in financial obligation.

"The structure modification would make it simpler for WBD to sell its linear TV networks," eMarketer analyst Ross Benes said, describing the cable TV company. "However, finding a buyer will be difficult. The networks owe money and have no indications of growth."

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

Today, the media company announced a multi-year offer increasing the total fees Comcast will pay to distribute Warner Bros Discovery's networks.

Warner Bros Discovery is sports betting the Comcast contract, together with a deal reached this year with cable television and broadband service provider Charter, will be a template for future negotiations with suppliers. That might help stabilize rates 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)