Shares dive 13% after reorganizing announcement

Follows course taken by Comcast's new spin-off company

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Challenges seen in selling debt-laden linear TV networks

(New throughout, includes details, background, remarks from industry insiders 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, preparing for a prospective sale or spinoff of its TV organization as more cable customers cut the cord.

Shares of Warner jumped after the company stated the new structure would be more deal friendly and it expected to finish the split by the middle of 2025. Warner shares closed at $12.49, up more than 15%.

Media business are thinking about choices for fading cable television organizations, a longtime golden goose where incomes are deteriorating as countless consumers welcome streaming video.

Comcast last month unveiled plans to divide many of its NBCUniversal cable television networks into a new public business. The brand-new company would be well capitalized and placed to acquire other cable television networks if the industry combines, one source informed Reuters.

Bank of America research analyst Jessica Reif Ehrlich composed that Warner Bros Discovery's cable tv properties are a "extremely logical partner" for Comcast's brand-new spin-off company.

"We strongly think there is capacity for fairly sizable synergies if WBD's direct networks were integrated with Comcast SpinCo," wrote Ehrlich, using the industry term for standard television.

"Further, we think WBD's standalone streaming and studio properties would be an attractive takeover target."

Under the brand-new structure for Warner Bros Discovery, the cable business 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 together with movie studios, consisting of Warner Bros Pictures and New Line Cinema.

The restructuring shows 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 habits," said Jonathan Miller, chief executive of digital media investment firm Integrated Media. "Now, it's winning as a company."

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

The media veteran and advisor anticipated Paramount and others might take a similar path.

CEO David Zaslav, a veteran deal-maker who led Discovery through its acquisition of Scripps Networks Interactive before getting the even larger target, AT&T's WarnerMedia, is positioning the business for its next chess relocation, composed MoffettNathanson analyst Robert Fishman.

"The concern is not whether more pieces will be walked around or knocked off the board, or if more combination will occur-- it is a matter of who is the purchaser and who is the seller," wrote Fishman.

Zaslav signaled that situation during Warner Bros Discovery's financier call last month. He said he prepared for President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media market consolidation.

Zaslav had actually engaged in merger talks with Paramount late in 2015, though an offer never materialized, according to a regulative filing last month.

Others injected a note of care, keeping in mind Warner Bros Discovery carries $40.4 billion in debt.

"The structure change would make it simpler for WBD to offer off its direct TV networks," eMarketer expert Ross Benes said, referring to the cable TV business. "However, finding a purchaser will be difficult. The networks owe money and have no indications of development."

In August, Warner Bros Discovery composed down the worth of its TV properties by over $9 billion due to unpredictability around costs from cable and satellite distributors and sports betting rights renewals.

This week, the media business announced a multi-year offer increasing the overall fees Comcast will pay to distribute Warner Bros Discovery's networks.

Warner Bros Discovery is sports betting the Comcast agreement, together with a deal reached this year with cable television and broadband provider Charter, will be a template for future negotiations with distributors. That might help stabilize prices 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)