Shares jump 13% after reorganizing 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, adds information, background, remarks from industry experts 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 decreasing cable television services such as CNN from streaming and studio operations such as Max, laying the groundwork for a potential sale or spinoff of its TV company as more cable television customers cut the cord.

Shares of Warner leapt after the company stated the brand-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 considering alternatives for fading cable services, a long time cash cow where incomes are deteriorating as millions of consumers embrace streaming video.

Comcast last month revealed plans to divide the majority of its NBCUniversal cable networks into a brand-new public company. The brand-new business would be well capitalized and placed to get other cable television networks if the industry consolidates, one source told Reuters.

Bank of America research study expert Jessica Reif Ehrlich wrote that Warner Bros Discovery's cable television assets are a "very sensible partner" for Comcast's brand-new spin-off company.

"We highly believe there is capacity for relatively large synergies if WBD's linear networks were combined with Comcast SpinCo," wrote Ehrlich, utilizing the market term for conventional tv.

"Further, our company believe WBD's standalone streaming and studio assets would be an appealing takeover target."

Under the new structure for Warner Bros Discovery, the cable television TV service 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 different department along with film studios, including Warner Bros Pictures and New Line Cinema.

The restructuring reflects an inflection point for the media industry, as financial investments in streaming services such as Warner Bros Discovery's Max are lastly paying off.

"Streaming won as a behavior," said Jonathan Miller, chief executive of digital media investment firm Integrated Media. "Now, it's winning as a business."

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's new corporate structure will distinguish growing studio and streaming properties from profitable however diminishing cable business, offering a clearer financial investment photo and most likely setting the phase for a sale or spin-off of the cable unit.

The media veteran and consultant forecasted Paramount and others may take a similar path.

CEO David Zaslav, a veteran deal-maker who led Discovery through its acquisition of Scripps Networks Interactive before obtaining the even bigger target, AT&T's WarnerMedia, is positioning the company for its next chess move, wrote MoffettNathanson expert Robert Fishman.

"The concern is not whether more pieces will be moved or knocked off the board, or if additional consolidation will occur-- it is a matter of who is the purchaser and who is the seller," composed Fishman.

Zaslav indicated that situation during Warner Bros Discovery's investor call last month. He stated he anticipated President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to media industry consolidation.

Zaslav had participated 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 caution, noting Warner Bros Discovery carries $40.4 billion in financial obligation.

"The structure modification would make it simpler for WBD to sell its linear TV networks," eMarketer analyst Ross Benes said, referring to the cable television business. "However, finding a buyer will be challenging. The networks are in debt and have no signs of growth."

In August, Warner Bros Discovery documented the worth of its TV assets by over $9 billion due to uncertainty around costs from cable television and satellite suppliers and sports betting rights renewals.

Today, the media company revealed a multi-year offer increasing the total costs Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is sports betting the Comcast contract, together with a deal reached this year with cable television and broadband company Charter, will be a design template for future settlements with suppliers. That might help stabilize pricing 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)