Warner Bros. Discovery, under the leadership of CEO David Zaslav, is the latest Hollywood studio to overhaul its corporate operations, potentially setting the stage for a spin-off of its legacy television assets. According to The Hollywood Reporter, the company announced plans to create a global linear TV division separate from its streaming and studio operations on Thursday, aiming to enhance “strategic flexibility” and unlock greater shareholder value.
The restructuring process will begin immediately, with full implementation expected by mid-2025. This move aligns with a broader trend among entertainment giants as they respond to the challenges facing legacy television. Comcast recently unveiled plans to spin off its struggling cable networks from its film, TV studio and theme park divisions. Similarly, Disney CEO Bob Iger has questioned the long-term importance of the company’s traditional TV networks, including ABC, suggesting they may no longer be central to Disney’s strategy. Paramount Global’s incoming CEO, Jeff Shell, has also signaled plans to manage CBS more aggressively for cash flow, acknowledging the declining state of linear television.
For Warner Bros. Discovery (WBD), the plan centers on consolidating its linear TV assets into a distinct holding company, allowing its core business to focus on growth opportunities. “Since the combination that created Warner Bros. Discovery, we have transformed our business and improved our financial position while providing world class entertainment to global audiences.” Zaslav also notes that WBD remains committed to ensuring that the global linear networks business drives free cash flow while streaming and studio operations concentrate on growth by delivering the world’s most compelling stories.
Once a significant profit center for studios, the cable TV sector has increasingly become a liability amid the rapid rise of cord-cutting. Last year, major pay-TV providers collectively lost about 5 million subscribers, with Comcast alone accounting for 2 million of those losses, according to Leichtman Research. The growing consumer preference for streaming services has further reduced the appeal of traditional bundled cable packages.
Under its new corporate structure, WBD will manage two distinct operating divisions. The global linear networks division will encompass legacy TV assets such as TNT, TBS and Discovery Channel, which offer a mix of sports, scripted and unscripted programming. Meanwhile, the streaming and studios division will focus on growth areas, free from the challenges posed by the declining linear TV market. This structure aims to clarify the company’s priorities and streamline its strategic initiatives.
Addressing financial challenges is another key component of WBD’s strategy. The company recently reported a $9.1 billion goodwill impairment charge to write down the value of its traditional TV networks. WBD stated that the new corporate structure will improve clarity and focus. The company also noted plans to evolve its board to support its strategy and maximize shareholder returns.
J.P. Morgan, Evercore and Guggenheim Securities are serving as advisors on the restructuring, with legal counsel provided by Kirkland & Ellis and Wachtell Lipton. As the media landscape undergoes profound changes, Warner Bros. Discovery’s reorganization reflects Hollywood’s broader efforts to adapt to an evolving industry and address the pressures facing legacy television businesses.