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Warner Bros. Discovery stock was up almost 10% on Monday morning after management announced that the conglomerate will split into two separate public companies. It’s a sweeping restructuring aimed at sharpening each unit’s strategic focus and unlocking shareholder value.
The move will carve out its streaming and studios business — home to HBO, Warner Bros. Television, DC Studios, and HBO Max — into a standalone entity, while placing CNN, TNT Sports, the Discovery Channel, and the Discovery+ platform under a new Global Networks company.
CEO David Zaslav will lead the newly formed Streaming & Studios division. Current CFO Gunnar Wiedenfels will be in charge of Global Networks. Both will remain in their existing roles until the split, which is expected to close by mid-2026 in a tax-free transaction.
Two units, both alike in dignity, but not in business dynamics
The separation underscores diverging financial futures within WBD’s sprawling empire. Streaming & Studios houses prestige, IP-driven businesses that demand heavy investment but offer long-term growth potential. Meanwhile, the Global Networks division boasts global scale and generous margins across 200 countries, reaching 1.1 billion viewers in 68 languages. It’s a mature business that pumps out cash. By unbundling, Warner Bros. Discovery hopes investors can more cleanly value each business, and that each company can move more nimbly in its respective market.
Companies often separate when their divisions have fundamentally different business models — such as (at least somewhat) regulated networks versus high-growth content studios — that otherwise make it hard for Wall Street to value them. Spinning them off allows investors to assess each unit on its own terms. The goal is to increase value by letting each company focus, grow, and be judged within its particular category, which in theory at least leads to better shareholder returns over time.
Moves like this also often come after years of acquisitions that bundle together very different businesses, creating a level of complexity that can blur individual business units’ performance and create a drag on stock valuation. Call it a make-up-to-break-up cycle.
That pattern certainly looks applicable now
After years of M&A and complicated integration, WBD is signaling that its current mix of assets is too broad and unalike for 2025’s highly fragmented and complex media landscape. By spinning off studios from networks, WBD is betting that two focused, streamlined companies can compete more effectively.
The deal also has a strong financial-engineering component. WBD announced a $17.5 billion bridge facility from JPMorgan Chase (JPM) to restructure its debt ahead of the split. Global Networks will retain up to a 20% stake in the streaming unit, which it plans to monetize to help reduce debt.
In sum: cleaned-up balance sheets plus greater clarity? Wall Street seems to like it already.