Warner Bros Discovery (WBD) on Thursday announced a plan to reorganize some of its television business units, with a focus on its cable TV networks and streaming video platforms.
Moving forward, WBD will operate its cable and international channels like TBS, TNT, Cartoon Network, CNN and Eurosport as part of a “global linear networks” unit, while other businesses like Max, Discovery Plus, HBO and Warner Bros Pictures will operate through a “streaming and studios” unit, the company said.
“Warner Bros. Discovery expects the new corporate structure to enhance clarity and focus, with each division positioned to deliver on its specific strategic and operational objectives while executing on initiatives to further key priorities for consolidated Warner Bros. Discovery,” a spokesperson said in a press release.
The global linear networks unit will “focus on maximizing profitability and free cash flow to continue deleveraging,” the spokesperson said, while the streaming and studios business will “focus on driving growth and strong returns on increasing invested capital.”
The new structure could make it easier for WBD to engage in certain transactions with other media companies and partners in the future, something the company hinted at by saying it might “pursue further value creation opportunities for both divisions in an evolving media landscape.”
The reorganization started this week and is expected to be finalized by the middle of 2025. It was not clear if layoffs were anticipated as part of the restructuring.
“Since the combination that created Warner Bros. Discovery, we have transformed our business and improved our financial position while providing world-class entertainment to global audiences,” Daviz Zaslav, the CEO of the company, said in a statement. “We continue to prioritize ensuring our global linear networks business is well positioned to continue to drive free cash flow, while our streaming and studios business focuses on driving growth by telling the world’s most compelling stories.”
Zaslav said the new corporate structure “better aligns our organization and enhances our flexibility with potential future strategic opportunities across an evolving media landscape, help us build on our momentum and create opportunities as we evaluate all avenues to deliver significant shareholder value.”
Like other media companies, WBD has faced external pressure on its traditional TV networks business, as advertisers shift their marketing spend toward connected TV platforms that offer more-granular audience targeting capabilities. WBD addressed this by launching a version of its streaming service Max that is priced at $10 per month and subsidized with advertising, while expanding the amount of premium sports it carries on some networks like TNT, TBS and Tru TV, making those channels more attractive to cable, satellite and some streaming distributors and enticing advertisers who are willing to spend against premium, appointment-viewing content.
WBD’s stock price was up 15 percent in mid-day trading, based largely on the company’s reorganization plan.
