Warner Bros. Discovery to split into two companies

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NEW YORK (AP) — Warner Bros. Discovery will split into two public companies by next year, calving off cable operations from its streaming service as the number of people “cutting the cord” brings with it a sustained upheaval in the entertainment industry.

Warner Bros. Discovery said Monday that Streaming & Studios will include Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, and HBO Max, as well as their film and television libraries.

The Global Networks company will include CNN, TNT Sports in the U.S., and Discovery, top free-to-air channels across Europe, and digital products such as the Discovery+ streaming service and Bleacher Report.

Shares jumped more than 7% before the market opened.

Warner Bros. Discovery CEO David Zaslav will serve as CEO of Streaming & Studios. Gunnar Wiedenfels, chief financial officer of Warner Bros. Discovery, will serve as CEO of Global Networks. Both will continue in their current roles until the separation.

Just days ago Warner Bros. Discovery shareholders voted to reject the 2024 pay packages of some executives, including Zaslav’s pay package of more than $51 million. The vote is symbolic, as it is nonbinding.

“By operating as two distinct and optimized companies in the future, we are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today’s evolving media landscape,” Zaslav said in a statement.

Warner Bros. Discovery said in December that it was implementing a restructuring plan that would have Warner Bros. Discovery serve as the parent company for two operating divisions, Global Linear Networks and Streaming & Studios. The announcement was taken as a preview of the separation of divisions that was announced Monday.

The cable industry has been under assault for years from streaming services like Disney, Netflix, Amazon and HBO Max, as well as internet plans offered by mobile phone companies. Comcast, which is of nearly equal size to Charter, spun off many of its cable television networks in November as as consumers increasingly swap out their cable TV subscriptions for streaming platforms.

Last month Charter Communications offered to acquire Cox Communications, a $34.5 billion merger that would combine two of the top three cable companies in the U.S.

So-called “cord cutting” has cost the industry millions of customers and left them searching for ways to successfully compete.

The Warner Bros. Discovery split is expected to be completed by the middle of next year. It still needs final approval from the Warner Bros. Discovery board.