Warner Bros. Discovery Announces New Corporate Structure, Dividing into Linear Networks and Streaming & Studios

Warner Bros. Discovery (NASDAQ: WBD) has announced a significant corporate restructuring, dividing the company into two distinct operating divisions: Global Linear Networks and Streaming & Studios. This new structure, authorized by the Board of Directors, aims to enhance strategic flexibility, maximize profitability, and unlock additional shareholder value.

The Global Linear Networks division will focus on maximizing profitability and free cash flow, primarily through its linear television business, which includes renowned networks offering news, sports, scripted, and unscripted programming. In contrast, the Streaming & Studios division will prioritize growth and returns on invested capital, leveraging its globally scaled streaming platform and storied film and entertainment studios.

The reorganization is expected to provide better clarity and focus for each division’s specific objectives while maintaining consolidated operations. Warner Bros. Discovery President and CEO, David Zaslav, emphasized that the new structure aligns the organization to drive free cash flow from the linear networks and growth from the streaming and studios segment, enhancing the company’s flexibility in an evolving media landscape.

The implementation of the new corporate structure is set to begin immediately, with the transition expected to be completed by mid-2025. Financial advisors J.P. Morgan, Evercore, and Guggenheim Securities, along with legal counsel Kirkland & Ellis and Wachtell Lipton, are supporting Warner Bros. Discovery in this restructuring.

The announcement has been well-received by investors, with the company’s shares showing a positive response to the news. This move reflects the growing divergence between traditional TV and streaming business models in the media industry and positions Warner Bros. Discovery for potential future strategic opportunities, including partnerships, sales, or spin-offs).