Warner Bros. Discovery Splits Streaming and Cable into 2 Companies

Warner Bros. Discovery just announced it plans to separate into two public companies.

One will oversee streaming and studio assets, including HBO, Max, Warner Bros. Pictures, DC Studios, and gaming.

The other will manage global television brands such as CNN, TNT, Discovery+, and Bleacher Report.

The change is expected by mid-2026 and aims to allow each business to operate with greater focus and clearer performance metrics.

The announcement comes just a month before Warner Bros. Pictures' biggest release of the year, "Superman."

WBD’s financial data backs this strategic decision.

In 2023, WBD streaming generated $10.15 billion in revenue and $103 million in EBITDA, marking its first profitable year after a $2.06 billion loss in 2022.

By 2024, EBITDA rose to $677 million with a 6.6% margin.

Cable networks, although still much larger with $20.18 billion in 2024 revenue, showed a decline from $21.24 billion in 2023.

Network EBITDA also dropped from $9.06 billion to $8.15 billion, though margins remained high, around 40%.

These data show that streaming is growing and improving in profitability.

Cable remains a strong cash generator, but its top line and viewership are in steady decline.

This makes streaming the future growth engine, while cable appears increasingly limited to cash management and cost control.

Realigning for Financial Clarity

Once the shift is finalized next year, CEO David Zaslav will lead the Streaming & Studios group, while CFO Gunnar Wiedenfels will head the Global Networks division.

This step builds on WBD’s 2024 internal reorganization and reflects a structure similar to Comcast’s recent media realignment.

“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 news release.

“This separation will invigorate each company by enabling them to leverage their strengths and specific financial profiles.

This will also allow each company to pursue important investment opportunities and drive shareholder value," Wiedenfels added.

To support the transition, WBD has secured a $17.5 billion bridge loan from J.P. Morgan.

Global Networks will retain up to 20% of the streaming unit, with plans to sell the stake to reduce debt.

The decision also follows S&P’s downgrade of WBD’s debt, citing leverage estimated between $35 billion and $38 billion.

Disney and Paramount are also reportedly exploring strategies to isolate legacy TV from digital content units.

Streaming performance now places WBD alongside Netflix and Disney in the conversation.

Netflix reported approximately $39 billion in 2024 revenue and achieved a 27% operating margin.

Disney, after years of streaming losses, posted a small profit in 2024 as its direct-to-consumer segment neared break-even.

By contrast, WBD reached streaming profitability a year earlier and is aiming for $1.3 billion in EBITDA in 2025.

Separating the units allows investors to evaluate each on its own merits.

The new structure could attract growth-focused capital to streaming while aligning the cable unit with efficiency-focused or legacy-focused investors. 

Our Take: Is This the Most Practical Path Forward?

I see this as a necessary decision, not just an aggressive one.

Keeping streaming tied to a shrinking cable business was holding both back. Separating them allows each to focus on what it does best.

For studios and streaming, it's about creating high-quality content and building audience loyalty.

For the networks, it's about stabilizing and making smarter bets on what still works.

The question now is whether both can stay competitive once they no longer share the same infrastructure. We can only watch and see.

Meanwhile, Netflix recently launched a major TV app redesign to enhance overall user experience.