Warner Bros. Discovery announces major breakup, separating streaming, cable divisions

WEB DESK: Warner Bros. Discovery, the owner of CNN and HBO Max, has announced that it will split into two separate companies by mid-2024. The media giant plans to divide its operations, with its studio and streaming divisions forming one company, and its traditional cable television networks forming another.

This decision comes amid a shift in the media landscape, where streaming services are gaining hundreds of millions of users worldwide, while cable TV audiences continue to decline. HBO Max has achieved success with popular shows like Succession, The White Lotus, and The Last of Us. In contrast, channels such as CNN have experienced decreasing viewership.

Under the new structure, hit shows and the company’s film division will be part of a business called Streaming & Studios, led by Warner Bros. Discovery CEO David Zaslav. The other company, named Global Networks, will include brands such as CNN, Discovery, and TNT Sports, and will be headed by CFO Gunnar Wiedenfels.

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Zaslav stated, “We are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today’s dynamic media environment.”

The split follows the 2022 merger that created Warner Bros. Discovery. Despite the announcement, the company’s stock performance was largely unaffected; shares declined nearly 3% on Monday, and the stock has fallen over 10% this year. Analyst Peter Jankovskis from Arbor Financial Services commented that separating the businesses could help investors better assess their individual values, noting that simplifying the company makes it easier for analysts to determine worth.

CNN, Warner Bros. Discovery’s flagship news channel, has seen its ratings fall. During the first three months of this year, it averaged 558,000 primetime viewers, a 6% decrease compared to the same period in 2024. Earlier this year, CNN announced it would lay off over 200 employees as part of a strategic shift toward digital offerings.

Meanwhile, Warner Bros. Discovery’s streaming platforms are performing well, ending the first quarter with over 122 million subscribers. The announcement of the breakup follows Comcast’s decision last year to spin off NBCUniversal’s cable TV division, including channels like MSNBC and CNBC, which is currently in progress.

Analyst Jankovskis added, “In a highly competitive market, many companies are choosing to separate their streaming or content operations from their traditional business so that each part can be valued independently.”