Warner Bros. Discovery revealed on Thursday that it will undergo a major corporate restructure. This strategy calls for the consolidation of three divisions into two: Global Linear Networks and Streaming & Studios. The adjustments are planned to take effect in mid-2025.
CEO David Zaslav emphasized the company’s objectives: “We continue to prioritize ensuring that our Global Linear Networks business is well positioned to drive free cash flow, while our Streaming & Studios business focuses on growth by telling the world’s most compelling stories.”
This restructuring comes amid concerns regarding media mergers and acquisitions. Wall Street analysts believe Warner Bros. Discovery may explore dividing up its business to mitigate the financial effect of decreasing linear networks. Last summer, the business announced a significant $9 billion write-down for its cable networks, primarily owing to the loss of NBA broadcasting rights.
In its press announcement, Warner Bros. Discovery described the restructuring as a measure to “enhance its strategic flexibility and create potential opportunities to unlock additional shareholder value.” This demonstrates the company’s proactive approach to solving the issues presented by transitioning from traditional television to streaming platforms.
Furthermore, the restructuring aligns with recent changes to the company’s board of directors. Daniel E. Sanchez, the nephew of significant shareholder John Malone, was nominated to the board in September, bringing the total number of members to 12. This move comes after two directors resigned in April owing to federal laws governing board service.
The timing of this restructuring is critical for the media sector, which is seeing decreased viewership for traditional television and the rise of streaming services. Warner Bros. Discovery’s strategic move is similar to measures taken by competitors such as NBCUniversal, which recently revealed plans to spin off the majority of its cable network portfolio.
