Warner Bros. Discovery to Split into Two Public Companies

 Warner Bros. Discovery (NASDAQ: WBD) announced plans today to split its operations into two independent public companies to increase strategic focus and flexibility.

The separation, which is expected to be tax-free, will create a Streaming & Studios company and a Global Networks company, each aimed at maximizing its potential in the evolving media landscape.

Streaming & Studios will consist of Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, and HBO Max, along with their film and television libraries. Global Networks will include CNN, TNT Sports in the U.S., Discovery and other international channels and digital products such as Discovery+ and Bleacher Report.

David Zaslav will lead Streaming & Studios as President and CEO, while Gunnar Wiedenfels will assume the role of President and CEO of Global Networks, both retaining their current positions at Warner Bros. Discovery until the separation is complete. The move is designed to give each entity the ability to focus on its strengths and address its unique market opportunities.

The separation is expected to close in mid-2026, subject to Warner Bros. Discovery Board approval, a tax opinion or private ruling from the IRS, and market conditions. It is intended to equip each company to be more agile and pursue its operational and financial goals with greater strategic flexibility.

J.P. Morgan and Evercore acted as financial advisors, and Kirkland & Ellis LLP served as legal advisor to Warner Bros. Discovery in this strategic move.

This announcement comes as Warner Bros. Discovery commits to enhancing shareholder value and follows the commencement of a tender offer and related consent solicitation to increase its debt portfolio, supported by a $17.5 billion bridge facility from J.P. Morgan.

The companies will have a well-capitalized structure post-separation, with Global Networks planning to retain up to a 20% stake in Streaming & Studios, which it intends to monetize to benefit its balance sheet.

This news is based on a press release from Warner Bros. Discovery.

In other recent news, Warner Bros. Discovery reported its first-quarter 2025 earnings, revealing earnings per share of -$0.18, which missed estimates of -$0.13. The company’s revenue also missed expectations, coming in at $8.98 billion compared to the $9.59 billion anticipated. 

While revenue missed targets, the company gained over 5 million subscribers, indicating growth in its streaming platform. Raymond James adjusted the company’s financial outlook, lowering its price target from $13.00 to $12.00, while maintaining an Outperform rating. The firm’s analysts noted stronger-than-expected adjusted EBITDA but a lack of revenue, particularly in the Studios division. 

Meanwhile, S&P Global Ratings downgraded Warner Bros. Discovery’s credit rating to ’BB+’ due to weakening credit metrics, with continued declines in revenue and cash flow in its linear TV operations. Conversely, BofA Securities reiterated its Buy rating with a $14.00 price target, expressing confidence in the company’s unique assets despite its underperformance since the merger. Additionally, Warner Bros. Discovery announced plans to rebrand its streaming platform, Max, as HBO Max this summer, aiming to increase the service's appeal by focusing on quality content.