Shares jump 13% after restructuring statement

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

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Challenges seen in offering debt-laden direct TV networks

(New throughout, includes details, background, remarks from industry insiders and analysts, updates share prices)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday chose to separate its decreasing cable TV organizations such as CNN from streaming and studio operations such as Max, preparing for a prospective sale or spinoff of its TV service as more cable customers cut the cord.

Shares of Warner jumped after the company said 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 considering options for fading cable television businesses, a longtime cash cow where revenues are deteriorating as millions of consumers embrace streaming video.

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

Bank of America research analyst Jessica Reif Ehrlich wrote that Warner Bros Discovery's cable television service possessions are a "really rational partner" for Comcast's brand-new spin-off company.

"We strongly believe there is capacity for fairly large synergies if WBD's linear networks were combined with Comcast SpinCo," composed Ehrlich, utilizing the market term for conventional television.

"Further, we believe WBD's standalone streaming and studio assets would be an appealing takeover target."

Under the brand-new structure for Warner Bros Discovery, the cable television service 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 department together with film studios, including Warner Bros Pictures and New Line Cinema.

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

"Streaming won as a behavior," said Jonathan Miller, president of digital media investment business Integrated Media. "Now, it's winning as a company."

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's new business structure will separate growing studio and streaming properties from lucrative however diminishing cable TV business, providing a clearer investment picture and likely setting the stage for a sale or spin-off of the cable television unit.

The media veteran and adviser forecasted Paramount and others might take a comparable 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 company for its next chess relocation, composed MoffettNathanson expert Robert Fishman.

"The question is not whether more pieces will be walked around or knocked off the board, or if further consolidation will occur-- it refers who is the buyer and who is the seller," wrote Fishman.

Zaslav signaled that circumstance 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, opening the door to media market consolidation.

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

Others injected a note of care, noting Warner Bros Discovery brings $40.4 billion in debt.

"The structure modification would make it simpler for WBD to sell its direct TV networks," eMarketer expert Ross Benes stated, describing the cable service. "However, discovering a buyer will be difficult. The networks are in financial obligation and have no signs of development."

In August, Warner Bros Discovery made a note of the worth of its TV assets by over $9 billion due to uncertainty around costs from cable television and satellite distributors and sports betting rights renewals.

This week, the media company revealed a multi-year offer increasing the total fees Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is sports betting the Comcast arrangement, together with a deal reached this year with cable television and broadband company Charter, will be a template for future settlements with distributors. That could help stabilize 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)