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The Warner Bros. Discovery will split into two companies

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The Discovery Channel: A New Company to Stream, and its Cable Channels: David Zaslav, Sr. John Boundary Vice President, and the Vision of Global Networks

Warner Bros. Discovery chief executive and president David Zaslav yielded to the reality of the digital age and to the skepticism of Wall Street investors on Monday by announcing he would split the company into two: one focusing on streaming, the other on its cable networks.

The film and television libraries, as well as DC Studios, will be part of the new “Streaming and Studios” company. The Discovery Plus streaming service, as well as CNN and Bleacher Report, will be run by the new company called Global Networks.

“The cultural significance of this great company and the impactful stories it has brought to life for more than a century have touched countless people all over the world. It’s a cherished legacy that we will continue in this next chapter of our celebrated history, said Zaslav in announcing the split.

“By operating as two distinct and optimized companies in the future, we are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today’s evolving media landscape.”

Warner Bros. Discovery’s history since has been marked by a series of moves to pay down that debt, including the killing of CNN’s nascent streaming service (which is just now being rebuilt), bids that failed to win renewal of NBA rights for Turner Sports, and layoffs at various properties.

The Divide And The Difficulties Between Warner Bros. Discovery And AT&T: Buying Versant, or Both, After Trump’s First Year?

The company has lost nearly half its market valuation since the merger, though shares bounced up by nearly 10% in the hours after Monday’s announcement. Zaslav had a compensation package valued at $52 million last year – making him one of the country’s highest-paid corporate chieftains, according to a study by Harvard Law School. In a symbolic vote, the shareholders voted against it.

The transaction needs to get an assessment from the U.S. IRS that will allow it to proceed free of taxes. President Trump has made clear in his first few months back in office that he is willing to deploy what are supposed to be non-partisan levers of government for political and ideological aims.

The president had previously served as an adviser on slashing federal budgets, so he was familiar with Musk and the public falling out with him. In the case of Warner Bros. Discovery, Trump has repeatedly blasted CNN as unfair, partisan and “fake news.”

Jonathan Klein tells NPR that the two companies bought from AT&T are much smaller than he had anticipated. Who buys these units now that they’re small enough to be bought?

Several former television executives asked whether the new parent for MSNBC and CNBC – named Versant – might be a natural buyer for Warner Bros. Discovery’s cable channels. Or private equity investors intent on maximizing profits might decide to pick up Warner Bros. Discovery’s cable networks, Versant – or both.

According to the Financial Times, Zaslav was considering creating a new company that would separate WBD’s streaming business from its legacy TV networks. Splitting the company in two appears to be WBD’s solution to handling those losses. WBD said that it’s taking out a $17.5 billion short-term loan to buy back some of its $37 billion debt ahead of the split. In an investor call, the company said that the majority of the companies would fall under Global Networks.

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