LOS ANGELES: Warner Bros. Discovery announced Monday it will separate into two independent, publicly traded companies in a tax-free transaction aimed at maximizing growth potential for its streaming and studio division and its global networks business.
The move, expected to be completed by mid-2026, will create Streaming & Studios, housing major entertainment brands like Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, and HBO Max, alongside their extensive film and TV libraries. Meanwhile, Global Networks will include CNN, TNT Sports in the U.S., Discovery’s international free-to-air channels, Discovery+, and digital platforms like Bleacher Report (B/R).
Current Warner Bros. Discovery CEO David Zaslav will lead Streaming & Studios, while CFO Gunnar Wiedenfels will become CEO of Global Networks. Both executives will remain in their current roles until the separation is finalized.
“This is about unlocking the full potential of our iconic brands,” Zaslav said in a statement. “By operating as two distinct companies, we can sharpen our focus, drive innovation, and compete more effectively in today’s rapidly changing media landscape.”
Wiedenfels emphasized the financial benefits of the split, stating that the separation will allow each company to pursue targeted investments, optimize operations, and enhance shareholder value.
Why the Split?
The decision follows a strategic review by Warner Bros. Discovery’s board, which concluded that separating the businesses would:
- Boost agility in responding to market opportunities.
- Attract investors aligned with each company’s growth profile.
- Strengthen financial performance by allowing distinct capital allocation strategies.
Streaming & Studios: A Powerhouse in Entertainment
The new Streaming & Studios company will leverage Warner Bros.’ century-long legacy in film and TV, including blockbuster franchises under DC Studios and premium content from HBO. The division will focus on scaling HBO Max, which is available in 77 markets, with plans to expand further in 2026.
The company aims to reach at least $3 billion in annual adjusted EBITDA, driven by its film and TV production, gaming, and theme park businesses.
Global Networks: A Leader in Live TV and Sports
Global Networks will operate CNN, TNT Sports, Discovery’s European channels, and digital platforms like Discovery+ and B/R, reaching 1.1 billion unique viewers worldwide. The division plans to expand live sports and news programming while capitalizing on its strong free cash flow.
Financial Structure and Next Steps
The separation will be structured as a tax-free transaction for U.S. federal income tax purposes. J.P. Morgan and Evercore are serving as financial advisors, with Kirkland & Ellis LLP providing legal counsel.
Warner Bros. Discovery also announced a $17.5 billion bridge financing facility from J.P. Morgan to refinance existing debt ahead of the split. Global Networks will retain up to a 20% stake in Streaming & Studios, which it may sell later to reduce debt.
The deal remains subject to regulatory approvals, IRS rulings, and final board approval.
Board Chairman Samuel A. Di Piazza Jr. called the move a “great outcome for shareholders,” reflecting the company’s commitment to unlocking value.
The separation marks the latest shift for Warner Bros. Discovery since its formation in 2022 from the merger of WarnerMedia and Discovery Inc.