Warner Bros. Discovery (NASDAQ: WBD) has unveiled a strategic plan to divide its operations into two separate publicly traded companies through a tax-free transaction aimed at maximizing growth potential and operational efficiency. The new entities will focus on distinct areas of media: Streaming & Studios, and Global Networks, reports Baltimore Chronicle with reference to Warner Bros. Discovery.
The Streaming & Studios segment will include major assets such as Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, HBO Max, Warner Bros. Games, Warner Bros. Tours, Retail and Experiences, as well as production studios in Burbank and Leavesden. Global Networks will oversee a robust portfolio of entertainment, sports, and news television brands including CNN, TNT Sports in the U.S., Discovery, key free-to-air channels across Europe, Discovery+ streaming service, and Bleacher Report (B/R).
David Zaslav, current President and CEO of Warner Bros. Discovery, will assume leadership of the new Streaming & Studios entity. Gunnar Wiedenfels, currently the company’s Chief Financial Officer, will become President and CEO of Global Networks. Both executives will retain their current roles until the separation process concludes.
Zaslav emphasized the importance of this move for the company’s future: “The cultural significance of this great company and the impactful stories it has brought to life for more than a century have touched countless people all over the world. It’s a treasured legacy we will proudly continue in this next chapter of our celebrated history. 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.”
Wiedenfels added that the split would unlock new opportunities for both units: “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. At Global Networks, we will focus on further identifying innovative ways to work with distribution partners to create value for both linear and streaming viewers globally while maximizing our network assets and driving free cash flow.”
Samuel A. Di Piazza, Jr., Chair of the Warner Bros. Discovery Board of Directors, stated that the decision aligns with commitments made to shareholders: “We committed to shareholders to identify the best strategy to realize the full value of our exciting portfolio of assets, and the Board believes this transaction is a great outcome for WBD shareholders. This announcement reflects the Board’s ongoing efforts to evaluate and pursue opportunities that enhance shareholder value.”
The company noted that over the past three years, significant achievements have laid the groundwork for this transformation. The separation is expected to bring greater strategic focus, allowing each business to be more agile, attract a growth-aligned investor base, and pursue operational and financial goals independently.
Streaming & Studios is positioned to be a global leader in content creation and storytelling, powered by an unparalleled library of intellectual property. Its strategy includes expanding HBO Max, which currently operates in 77 markets and has additional launches planned in 2026. The entity will prioritize continued investment in high-quality programming and aims to return to a target of at least $3 billion in annual adjusted EBITDA.
Global Networks will retain its reach across 1.1 billion unique viewers in 68 languages across 200 countries and territories. With industry-leading margins and strong free cash flow, it plans to enhance its live content in sports and news, grow its digital offerings—including Discovery+, B/R, and CNN’s new streaming product—and capitalize on international expansion.
The transaction will be executed in a manner intended to be tax-free for U.S. federal income tax purposes. The companies will also establish transitional service agreements and commercial arrangements to ensure operational continuity post-separation.
Each entity will be well-capitalized. To support the separation and optimize its capital structure, Warner Bros. Discovery has initiated tender offers and consent solicitations backed by a $17.5 billion committed bridge facility from J.P. Morgan. This bridge financing is expected to be refinanced before the split. Global Networks is also expected to retain up to a 20% stake in Streaming & Studios, which it plans to monetize tax-efficiently to further reduce its debt.
The separation is anticipated to be finalized by mid-2026, subject to standard closing conditions, including approval from Warner Bros. Discovery’s Board of Directors, necessary tax rulings, and prevailing market conditions.
J.P. Morgan and Evercore are serving as financial advisors for the transaction, with Kirkland & Ellis LLP acting as legal counsel.
A conference call regarding the announcement was held at 8:30 a.m. ET, and a live webcast is available in the Investor Relations section of the company’s website at https://ir.wbd.com.
Warner Bros. Discovery cautions that forward-looking statements regarding the anticipated benefits, timing, and structure of the separation involve risks and uncertainties. These include regulatory and market risks, potential changes to the company’s configuration, and the execution challenges of transitioning to two independent entities. Further risk details can be found in WBD’s filings with the U.S. Securities and Exchange Commission.
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