Discovery is creating a new corporate structure, slimming down from three divisions to two and establishing a clear separation between linear networks and the streaming and studios businesses.
The two new operating units will be called Global Linear Networks and Streaming & Studios.
HBO, even though it still has a linear presence, will be housed in Streaming & Studios.
The objective of such a move would be to eliminate the financial drag of linear networks, which are losing subscribers and advertising revenue at a steady clip.
“We continue to prioritize ensuring our Global Linear Networks business is well positioned to continue to drive free cash flow, while our Streaming & Studios business focuses on driving growth by telling the world’s most compelling stories,” CEO David Zaslav said.
Stock movement and other details are updated. Warner Bros…. Streaming and studios will be clearly separated from linear networks in a new corporate structure that Discovery is developing, which will reduce the company’s three divisions to two.
Streaming and Studios and Global Linear Networks will be the names of the two new operating units.
HBO will be under the Streaming & Studios umbrella, despite its continued linear presence.
The decision, which was made public Thursday morning, caused WBD’s stock to rise more than 12% in early trading, putting the struggling company in positive territory for 2024 so far. After the announcement, which included CEO David Zaslav’s reference to “strategic opportunities,” speculation regarding M&A options will only intensify. “.”.
NBCUniversal, which recently announced the spinoff of the majority of its cable network portfolio into a new stand-alone company, is considering the company as a possible deal partner. The new company, currently known as SpinCo, plans to formally begin operations by the end of 2025. Executives from NBCU and Comcast have stated that they believe there is a chance SpinCo will be involved in joint ventures or third-party networks will join the company. Comcast-NBCU and WBD have previously discussed a possible streaming partnership, but no deal has been reached.
WBD stated in a press release that the reorganization is “intended to improve its strategic adaptability and generate possible prospects to unlock further shareholder value.”. “”.
The new structure is expected to be operational by the middle of 2025.
“While our Streaming & Studios business focuses on driving growth by telling the world’s most compelling stories, we continue to prioritize making sure our Global Linear Networks business is well positioned to continue driving free cash flow,” commented CEO David Zaslav. We can build on our momentum and generate opportunities as we assess all options to generate substantial shareholder value thanks to our new corporate structure, which also better aligns our organization and increases our flexibility with possible future strategic opportunities across a changing media landscape. “.”.
