Shares jump 13% after reorganizing statement

Follows course taken by Comcast's brand-new spin-off business

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Challenges seen in selling debt-laden linear TV networks

(New throughout, adds details, background, comments from industry insiders and experts, updates share costs)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday chose to separate its declining cable businesses such as CNN from streaming and studio operations such as Max, laying the groundwork for a prospective sale or spinoff of its TV service as more cable television subscribers cut the cable.

Shares of Warner jumped after the business 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 options for fading cable services, a long time golden goose where earnings are deteriorating as millions of consumers accept streaming video.

Comcast last month revealed plans to split most of its NBCUniversal cable networks into a brand-new public company. The new business would be well capitalized and placed to acquire other cable television networks if the market consolidates, one source informed Reuters.

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

"We strongly think there is potential for fairly large synergies if WBD's linear networks were combined with Comcast SpinCo," wrote Ehrlich, using the industry term for traditional television.

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

Under the brand-new structure for Warner Bros Discovery, the cable company including TNT, Animal Planet and CNN will be housed in an unit called Global Linear Networks.

Streaming platforms Max and Discovery+ will be under a different division along with film studios, consisting of Warner Bros Pictures and New Line Cinema.

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

"Streaming won as a behavior," said Jonathan Miller, primary executive of digital media investment company Integrated Media. "Now, it's winning as an organization."

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's new corporate structure will differentiate growing studio and streaming properties from lucrative but shrinking cable service, giving a clearer financial investment image and most likely setting the phase for a sale or spin-off of the cable system.

The media veteran and advisor 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 larger target, AT&T's WarnerMedia, is placing the company for its next chess move, composed MoffettNathanson analyst Robert Fishman.

"The concern is not whether more pieces will be walked around or knocked off the board, or if further debt consolidation will take place-- it refers who is the buyer and who is the seller," composed Fishman.

Zaslav signified that scenario during Warner Bros Discovery's investor call last month. He said he expected President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media industry consolidation.

Zaslav had actually taken part in merger talks with Paramount late in 2015, though a deal never emerged, according to a regulative filing last month.

Others injected a note of care, noting Warner Bros Discovery carries $40.4 billion in financial obligation.

"The structure modification would make it easier for WBD to sell its direct TV networks," eMarketer analyst Ross Benes stated, referring to the cable television TV business. "However, discovering a buyer will be tough. The networks owe money and have no signs of growth."

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

This week, the media business announced a multi-year deal increasing the total charges Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is wagering the Comcast agreement, together with an offer reached this year with cable and broadband service provider Charter, will be a template for future settlements with suppliers. That might assist support 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)