Shares dive 13% after restructuring statement

Follows path taken by Comcast's new spin-off company

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Challenges seen in selling debt-laden linear TV networks

(New throughout, includes details, background, remarks from market insiders and analysts, updates share rates)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday chose to separate its declining cable businesses such as CNN from streaming and studio operations such as Max, preparing for a possible sale or spinoff of its TV service as more cable customers cut the cable.

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

Media business are thinking about alternatives for fading cable television TV businesses, a longtime cash cow where incomes are eroding as millions of customers welcome streaming video.

Comcast last month unveiled plans to split the majority of its NBCUniversal cable networks into a new public company. The new company would be well capitalized and placed to get other cable television networks if the market consolidates, one source informed Reuters.

Bank of America research expert Jessica Reif Ehrlich composed that Warner Bros Discovery's cable tv possessions are a "really sensible partner" for Comcast's brand-new spin-off business.

"We strongly think there is capacity for fairly substantial synergies if WBD's linear networks were combined with Comcast SpinCo," composed Ehrlich, utilizing the market term for traditional tv.

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

Under the new structure for Warner Bros Discovery, the cable business including TNT, Animal Planet and CNN will be housed in a system called Global Linear Networks.

Streaming platforms Max and Discovery+ will be under a separate division together with film 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 lastly settling.

"Streaming won as a behavior," said Jonathan Miller, president of digital media financial investment business Integrated Media. "Now, it's winning as a service."

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's brand-new business structure will distinguish growing studio and streaming assets from lucrative but shrinking cable organization, giving a clearer financial investment photo and most likely setting the stage for a sale or spin-off of the cable unit.

The media veteran and advisor anticipated 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 obtaining the even larger target, AT&T's WarnerMedia, is positioning the business for its next chess relocation, composed MoffettNathanson expert Robert Fishman.

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

Zaslav signified that circumstance during Warner Bros Discovery's financier call last month. He said he prepared for President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to media market consolidation.

Zaslav had actually engaged in merger talks with Paramount late last year, though an offer never emerged, according to a regulative filing last month.

Others injected a note of care, keeping in mind Warner Bros Discovery brings $40.4 billion in debt.

"The structure change would make it easier for WBD to sell off its linear TV networks," eMarketer expert Ross Benes said, referring to the cable company. "However, finding a purchaser will be tough. The networks owe money and have no indications of growth."

In August, Warner Bros Discovery documented the value of its TV properties by over $9 billion due to unpredictability around costs from cable television and satellite distributors and sports betting rights renewals.

This week, the media business announced a multi-year deal increasing the total charges Comcast will pay to distribute Warner Bros Discovery's networks.

Warner Bros Discovery is wagering the Comcast agreement, together with a deal reached this year with cable and broadband service provider Charter, will be a template for future negotiations with distributors. That could help 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)