Warner Bros. Discovery to Split Into Two Companies

Media|Warner Bros. Discovery to Split Into Two Companies

Warner Bros. Discovery, the film and TV colossus behind HBO and CNN, announced Monday that it would cleave itself into two companies, separating its cable networks and streaming businesses.

David Zaslav, the chief executive of Warner Bros. Discovery, will lead the company’s streaming and studios business, which will include the streaming service HBO Max and Warner Bros. Motion Picture Group. The cable business, which will include CNN, will be run by Gunnar Wiedenfels, the chief financial officer of Warner Bros. Discovery.

“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,” Mr. Zaslav said in a statement.

U.S. media giants have been looking to jettison their declining cable networks while preserving their faster-growing streaming networks. Comcast, the parent company of NBC and Universal Studios, said last year it would separate its traditional TV business into a new company, called Versant.

Since it was created three years ago, Warner Bros. Discovery has struggled to convince shareholders that it had a winning combination of lighter fare like “90 Day Fiancé” and prestige hits like “The White Lotus” on its traditional networks and streaming services. The company has lost roughly half its value since it was forged through the fusion of the reality TV company Discovery and the vestiges of Time Warner.

A key question will be how the two new companies split Warner Bros. Discovery’s $37 billion in debt. The company did not announce how much debt it would place on each new entity, but it did say that it is taking out a $17.5 billion short-term loan ahead of the split to buy back some debt from bondholders. Doing so could help appease investors who might have concerns about the plan.

In addition to CNN, the cable networks group will include TNT, Discovery, free-to-air channels in Europe and TV rights to U.S. sporting events, including the National Hockey League and the March Madness N.C.A.A. Basketball Tournament. The streaming business will include Warner Bros. Television, DC Studios and HBO, as well as the company’s film and TV libraries.

This is a developing story. Check back later for additional details.