Shares dive 13% after restructuring statement

Follows course taken by Comcast's new spin-off business

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Challenges seen in selling debt-laden direct TV networks

(New throughout, adds information, 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 chose to separate its declining cable television businesses such as CNN from streaming and studio operations such as Max, laying the groundwork for a prospective sale or spinoff of its TV service as more cable television subscribers cut the cable.

Shares of Warner leapt after the company stated the new structure would be more deal friendly and it expected to complete 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 television organizations, a long time golden goose where earnings are wearing down as millions of consumers embrace streaming video.

Comcast last month revealed strategies to split most of its NBCUniversal cable networks into a new public business. The new business would be well capitalized and positioned to acquire other cable television 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 assets are a "extremely sensible partner" for Comcast's brand-new spin-off business.

"We highly believe there is potential for relatively sizable synergies if WBD's direct networks were combined with Comcast SpinCo," composed Ehrlich, utilizing the industry term for traditional tv.

"Further, our company believe WBD's standalone streaming and studio assets would be an appealing takeover target."

Under the brand-new structure for Warner Bros Discovery, the cable TV organization 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 along with movie studios, including Warner Bros Pictures and New Line Cinema.

The restructuring shows an inflection point for the media industry, as financial investments in streaming services such as Warner Bros Discovery's Max are lastly paying off.

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

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's new business structure will separate growing studio and streaming possessions from rewarding however shrinking cable television TV service, giving a clearer investment photo and most likely setting the phase for a sale or spin-off of the cable unit.

The media veteran and advisor forecasted Paramount and others might take a comparable path.

CEO David Zaslav, a veteran deal-maker who led Discovery through its acquisition of Scripps Networks Interactive before getting the even bigger target, AT&T's WarnerMedia, is placing the company for its next chess move, composed MoffettNathanson expert Robert Fishman.

"The concern is not whether more pieces will be moved around or knocked off the board, or if additional consolidation will happen-- it refers who is the purchaser and who is the seller," composed Fishman.

Zaslav signaled that scenario throughout Warner Bros Discovery's financier call last month. He said he anticipated President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media market debt consolidation.

Zaslav had engaged in merger talks with Paramount late in 2015, though an offer never emerged, according to a regulatory 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 easier for WBD to offer off its direct TV networks," eMarketer expert Ross Benes said, referring to the cable business. "However, discovering a buyer will be tough. The networks are in financial obligation and have no indications of growth."

In August, Warner Bros Discovery composed down the value of its TV assets by over $9 billion due to uncertainty around charges from cable television and satellite distributors and sports betting rights renewals.

Today, the media business revealed a multi-year offer increasing the total costs Comcast will pay to distribute Warner Bros Discovery's networks.

Warner Bros Discovery is wagering the Comcast agreement, together with an offer reached this year with cable television and broadband supplier Charter, will be a template for future settlements with distributors. That could assist support prices 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)