Warner Bros. Discovery to split into 2 companies, dividing cable and streaming services

Shaquille O'Neal, from left, Ernie Johnson, Kenny Smith and Charles Barkley speak at the NBA Awards on Monday, June 25, 2018, at the Barker Hangar in Santa Monica, Calif. (Photo by Chris Pizzello/Invision/AP, File)

NEW YORK -- Warner Bros. Discovery will split into two public companies by next year, calving off its cable operations from its streaming service.

Warner Bros. Discovery said Monday that Streaming & Studios will include Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, and HBO Max, as well as their film and television libraries.

The Global Networks company will include CNN, TNT Sports in the U.S., and Discovery, top free-to-air channels across Europe, and digital products such as the Discovery+ streaming service and Bleacher Report.

Shares jumped more than eight per cent before the market open.

Warner Bros. Discovery CEO David Zaslav will serve as CEO of Streaming & Studios. Gunnar Wiedenfels, chief financial officer of Warner Bros. Discovery, will serve as CEO of Global Networks. Both will continue in their current roles until the separation.

Just days ago Warner Bros. Discovery shareholders voted to reject the 2024 pay packages of some executives, including Zaslav’s pay package of more than US$51 million. The vote is symbolic, as it is non-binding.

“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 statement.

Warner Bros. Discovery said in December that it was implementing a restructuring plan that would have Warner Bros. Discovery serve as the parent company for two operating divisions, Global Linear Networks and Streaming & Studios. The announcement was taken as a preview of the separation of divisions that was announced Monday.

The split is expected to be completed by the middle of next year. It still needs final approval from the Warner Bros. Discovery board.

By Michelle Chapman