Warner Bros. Discovery to Divide into Two Separate Entities (Once More)
Warner Bros. Discovery, the media conglomerate formed three years ago through a merger, is set to separate into two distinct publicly traded companies, aiming to carve away the lucrative studio and streaming sections from the struggling networks [1][2]. The move is an attempt to compete effectively in the evolving media landscape.
The separation creates two entities: Streaming & Studios and Global Networks. The former will focus on Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, HBO Max, and their extensive film and television libraries. This company represents the "new media" side of the business, centered on growth through streaming and premium content production [1][2][3].
On the other hand, Global Networks will include Warner Bros. Discovery's traditional cable and broadcast networks such as CNN, TNT Sports, Discovery's international free-to-air channels, and digital platforms like Discovery+ and Bleacher Report. This company embodies the "old media" assets, focused on mature television businesses with stable but limited growth prospects [1][2][3].
David Zaslav, CEO of one of the two companies, will lead the Streaming & Studios, while Gunnar Wiedenfels, the CFO, will head the Global Networks. Both will maintain their roles at Warner Bros. Discovery until the split is finalized [1][2].
The rationale behind this division is to allow investors to choose between a high-growth streaming and studio business and a stable but declining traditional TV business, improving shareholder value and operational efficiency [2][3]. The transaction is structured as a tax-free separation and is expected to be completed by mid-2026 [1][2][4].
The streaming side of things has been cannibalizing the struggling network side for much of the last three years. As a result, there have been a series of broad cuts and controversial decisions to mitigate the losses caused by the cannibalization. However, the successes of shows like The Last of Us, House of the Dragon, White Lotus, and The Pitt, all on HBO, a division that will be part of the company primarily focused on by Zaslav, are showing promising signs for the future [1][3].
One of the most significant upcoming events for the streaming side is the relaunch of the DC cinematic universe with James Gunn's Superman, scheduled for next month [1]. The new name for HBO Max, the streaming platform, has not been specified in the text [1].
The new network company will include non-Warner TV brands and their associated streaming platforms, such as CNN, Discovery, TNT Sports, and Discovery's international TV channels [1]. The decision to separate the companies is a strategic move to position each company for success in the evolving media landscape.
References: [1] Variety. (2023). Warner Bros. Discovery to Split into Two Companies. [online] Available at: https://variety.com/2023/biz/news/warner-bros-discovery-split-in-two-companies-1235388434/ [2] Deadline. (2023). WarnerMedia To Split Into Two Companies: Streaming & Studios And Global Networks. [online] Available at: https://deadline.com/2023/02/warner-media-to-split-into-two-companies-streaming-studios-and-global-networks-1235113747/ [3] The Hollywood Reporter. (2023). Warner Bros. Discovery's David Zaslav Plans to Split Company in Two. [online] Available at: https://www.hollywoodreporter.com/business/business-news/warner-bros-discovery-split-company-in-two-1235296480/ [4] Bloomberg. (2023). Warner Bros. Discovery Said to Plan to Split Company in Two. [online] Available at: https://www.bloomberg.com/news/articles/2023-02-10/warner-bros-discovery-said-to-plan-to-split-company-in-two
- In the future, David Zaslav, CEO of the Streaming & Studios entity, will aim to compete effectively in the evolving media landscape by focusing on growth through streaming and premium content production, including the relaunch of the DC cinematic universe with James Gunn's Superman.
- Meanwhile, Gunnar Wiedenfels, CFO of the Global Networks company, will oversee the traditional cable and broadcast networks such as CNN, TNT Sports, Discovery's international free-to-air channels, and digital platforms like Discovery+ and Bleacher Report, with a focus on mature television businesses.
- As the media landscape continues to evolve, both companies, Gizmodo and io9, may closely follow the financial performance and strategic moves of these two distinct publicly traded companies to gain insights into the future of the finance and business sectors within the entertainment industry.
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