Warner Bros Discovery Splits into Two Separate Publicly-Traded Companies

Warner Bros Discovery is breaking itself apart. By mid-2026, the media giant will split into two distinct publicly traded companies: one focused on streaming and studio production, and another centered on cable networks and global broadcasting. The move, long anticipated by industry watchers, is a response to changing viewer habits, stagnant legacy revenue, and deep investor dissatisfaction with Warner Bros’ current structure.

The company announced that CEO David Zaslav will lead the new Streaming & Studios entity, which includes HBO, HBO Max, Warner Bros Pictures, Warner Bros Television, and DC Studios. The second company, Global Networks, will be led by CFO Gunnar Wiedenfels. It will house CNN, TNT Sports, Discovery, international channels, and digital products like Discovery+ and Bleacher Report.

Strategic Clarity Over Conglomerate Complexity

The decision to split reflects a growing belief that Warner Bros’ component businesses were working at cross purposes. Legacy cable assets, while still profitable, are shrinking. The shift toward streaming has required enormous capital investment and a very different strategic approach. By separating these operations, the company hopes to give each business the focus—and investor narrative—it needs to compete more effectively.

Since the 2022 merger between WarnerMedia and Discovery, the combined entity has struggled to meet investor expectations. Warner Bros Discovery stock has dropped nearly 60% since the merger closed, and the company has been saddled with over $30 billion in debt. S&P Global recently downgraded Warner’s credit rating to junk, citing declining revenue in the cable segment and challenges in scaling its streaming efforts profitably.

Investors have grown frustrated not only with the company’s lagging performance but also with executive compensation. Last week, 59% of shareholders voted against Zaslav’s $51.9 million 2024 pay package in a rare nonbinding rebuke.

Warner Bros’ Asset Value, Debt Relief, and Competitive Focus

The split is designed to unlock value by giving each unit the independence to pursue growth strategies without the drag of unrelated operations. Global Networks will retain up to a 20% stake in Streaming & Studios, using the proceeds to help service Warner’s existing debt load. WBD has also secured a $17.5 billion bridge loan from J.P. Morgan, which both companies will help repay through new debt issuances post-separation.

From an investor’s perspective, the Streaming & Studios company offers exposure to high-growth potential through IP-driven franchises, direct-to-consumer platforms, and global content licensing. This aligns with the broader market trend favoring digital-first media models, where Netflix and Amazon Prime Video continue to lead.

Meanwhile, Global Networks holds more stable but declining cash flows. It remains the company’s largest revenue generator, despite a 6% drop in cable revenue in the most recent quarter. As a standalone company, it may become a takeover target or pursue its own acquisitions, according to remarks by Wiedenfels.

Same Product, New Packaging: Media Investors Take Note

This latest restructuring follows a wave of similar moves across legacy media. Comcast is spinning out its cable assets into a new firm called Versant. Lionsgate has finalized its Starz separation. Paramount Global and Disney have both explored asset sales and realignment.

For Warner Bros, the message is clear: consolidation may no longer be the answer. Instead, disaggregation allows for simpler financial narratives, more precise strategic goals, and cleaner balance sheets. The legacy of Warner Bros as a storytelling powerhouse continues—but now, with separate playbooks for the worlds of streaming and traditional broadcast.

Will Warner Bros’ corporate split create real investor value or just kick its problems further down the road? Tell us what you think.

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