Shares jump 13% after reorganizing announcement

Follows path taken by Comcast's brand-new spin-off business

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Challenges seen in selling debt-laden linear TV networks

(New throughout, includes details, background, comments from industry experts and experts, updates share costs)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

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

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

Media business are thinking about options for fading cable businesses, a longtime golden goose where revenues are deteriorating as countless customers welcome streaming video.

Comcast last month unveiled plans to split most of its NBCUniversal cable networks into a brand-new public company. The new business would be well capitalized and placed to acquire other cable networks if the market consolidates, one source told Reuters.

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

"We highly believe there is capacity for fairly large synergies if WBD's direct networks were combined with Comcast SpinCo," composed Ehrlich, using the market term for traditional tv.

"Further, we believe WBD's standalone streaming and studio possessions would be an attractive takeover target."

Under the new structure for Warner Bros Discovery, the cable television 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 different division together with 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 finally paying off.

"Streaming won as a habits," said Jonathan Miller, primary executive of digital media investment firm Integrated Media. "Now, it's winning as an organization."

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's brand-new business structure will distinguish growing studio and streaming possessions from lucrative but shrinking cable television TV organization, providing a clearer investment picture and likely setting the phase for a sale or spin-off of the cable television unit.

The media veteran and adviser forecasted Paramount and others may take a comparable course.

CEO David Zaslav, a veteran deal-maker who led Discovery through its acquisition of Scripps Networks Interactive before acquiring the even larger target, AT&T's WarnerMedia, is positioning the business for its next chess move, wrote MoffettNathanson analyst Robert Fishman.

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

Zaslav indicated that scenario during Warner Bros Discovery's financier call last month. He stated he expected President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to media industry combination.

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

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

"The structure modification would make it much easier for WBD to offer off its direct TV networks," eMarketer expert Ross Benes said, referring to the cable television company. "However, finding a purchaser will be challenging. The networks are in debt and have no signs 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 business announced a multi-year offer increasing the general costs Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is sports betting the Comcast arrangement, together with an offer reached this year with cable and broadband supplier Charter, will be a design template for future settlements with distributors. That might assist 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)