Edited by: TJVNews.com

In a dramatic and potentially game-changing move for the media industry, Warner Bros. Discovery is breaking itself into two separate companies — a seismic split designed to sharpen focus, unlock value, and weather the storm of rapidly changing viewer habits.

According to extensive coverage from The New York Post, the reorganization will create two standalone entities: one built around the legacy world of cable and global TV networks, and the other centered on streaming and studio content. The new structure is a bold attempt to navigate an industry being rapidly reshaped by consumer migration to digital platforms and away from traditional cable.

One Company, Two Paths

The first of the new entities, tentatively dubbed Global Networks, will house a lineup of well-known cable brands including CNN, TBS, and TNT, along with Discovery+, a streaming service focused on unscripted and lifestyle programming. It will also control a slate of international assets and maintain ownership of Bleacher Report, a key player in digital sports content.

The second, more premium-facing company — known for now as Streaming & Studios — will include crown jewels such as HBO Max, Warner Bros. Pictures, and its television production division, the engine behind a litany of award-winning shows and blockbusters.

The New York Post reported that the company’s leadership believes the split will enhance operational focus, streamline strategy, and potentially attract a higher valuation on Wall Street than the current bundled entity.

“This separation is about empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today’s evolving media landscape,” said Warner Bros. Discovery CEO David Zaslav, who will continue leading the newly formed Streaming & Studios business.

A Retreat from the 2022 Megamerger

The move is also a stunning reversal of the 2022 mega-merger that originally brought WarnerMedia and Discovery Communications together in a $43 billion transaction engineered by AT&T. That deal was billed at the time as an effort to create a media powerhouse that could rival Netflix and Disney in the content wars.

However, two years later, the gamble appears to have fallen short. The merger saddled the company with a towering $34 billion debt load, viewer preferences have continued shifting toward streaming, and The New York Post report highlighted that the once-vaunted “synergies” between Warner’s prestige film and TV assets and Discovery’s lifestyle empire have failed to deliver the expected upside.

Instead, cable revenue — long the foundation of the old media business model — has been steadily eroding. In Q1 2025, cable network revenue declined by 6% compared to the same period last year. While these networks remain the company’s single largest revenue-generating segment, their trajectory is clearly downward.

Zaslav’s attempts to cut costs and reorganize have drawn mixed reviews. According to the report in The New York Post, Warner Bros. Discovery stock has plummeted nearly 60% since the merger closed. Further signaling investor frustration, 59% of shareholders voted against Zaslav’s $51.9 million compensation package for 2024 — a rebuke rarely seen at this scale in corporate America.

Leadership and Financial Strategy

As Zaslav takes the reins at Streaming & Studios, CFO Gunnar Wiedenfels will step into the CEO role at Global Networks. The duo will lead the breakaway effort at a time when Warner Bros. Discovery is under intense financial pressure.

Earlier this month, S&P Global downgraded the company’s debt to “junk” status, citing the declining cable business and uncertain cash flow. This downgrade reflects increased investor skepticism about Warner’s ability to service its debt obligations.

To facilitate the split, Warner Bros. Discovery secured a $17.5 billion bridge loan from JPMorganChase. As The New York Post report explained, both spinoff companies will issue new debt to repay this loan. A significant portion of the existing $34 billion in debt will remain with Global Networks, though it will continue to benefit from its 20% equity stake in Streaming & Studios, which it can leverage to chip away at its liabilities.

A Strategic Pivot — and a Risky One

The plan places Warner Bros. Discovery in alignment with a broader trend among traditional media giants. Comcast, for instance, is also moving to spin off its cable networks into a separate firm named Versant, which is expected to launch before the end of the year.

In making this move, The New York Post report noted that Warner Bros. Discovery hopes to create two more agile and independently competitive players in a bifurcated market — one battling to preserve the last cashflows of the linear TV era, and the other chasing streaming growth in an increasingly saturated market dominated by Netflix, Amazon Prime Video, and Disney+.

The separation may also open up opportunities for mergers or acquisitions, especially for the content-rich Streaming & Studios unit. Analysts speculate that an unshackled HBO Max and Warner Bros. studio could be more attractive to potential buyers or strategic partners without the burden of legacy media assets.

In a statement echoed by The New York Post, Wiedenfels emphasized the upside potential: “The separation will enable both companies to focus on their strengths. It gives us the flexibility to adapt, invest, and grow in the sectors where we can lead.”

Market Reaction and Industry Implications

Investor reaction has been cautiously optimistic. Shares of Warner Bros. Discovery saw a modest uptick following the announcement, though analysts warn that meaningful recovery depends on how well each company executes its revamped strategy.

“Breaking up is the easy part,” one analyst told The New York Post. “Running lean, growing profits, and keeping subscribers from churning — that’s the hard part.”

Observers are also watching to see how the split impacts Warner’s creative talent, many of whom have criticized previous cost-cutting measures that led to show cancellations, delayed releases, and the shelving of completed films.

For now, though, the move marks a definitive new chapter in the evolution of one of America’s most storied entertainment giants.

As The New York Post report aptly put it, Warner Bros. Discovery is “ditching the past to survive the future.” Whether the company can thrive — or simply survive — in this new two-headed form remains the billion-dollar question.