Shares dive 13% after reorganizing announcement

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

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Challenges seen in offering debt-laden linear TV networks

(New throughout, includes details, background, comments from market insiders and experts, 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 services such as CNN from streaming and studio operations such as Max, preparing for a potential sale or spinoff of its TV organization as more cable customers cut the cable.

Shares of Warner jumped after the business stated the brand-new structure would be more deal friendly and it anticipated to finish the split by the middle of 2025. Warner shares closed at $12.49, up more than 15%.

Media business are considering alternatives for fading cable TV companies, a long time golden goose where revenues are eroding as countless customers embrace streaming video.

Comcast last month unveiled strategies to divide the majority of its NBCUniversal cable television networks into a new public company. The brand-new company would be well capitalized and positioned to obtain other cable networks if the market combines, one source told Reuters.

Bank of America research expert Jessica Reif Ehrlich wrote that Warner Bros Discovery's cable tv assets are a "really logical partner" for Comcast's new spin-off business.

"We strongly believe there is capacity for fairly sizable synergies if WBD's direct networks were integrated with Comcast SpinCo," wrote Ehrlich, using the market term for conventional tv.

"Further, our company believe WBD's standalone streaming and studio properties would be an attractive takeover target."

Under the brand-new structure for Warner Bros Discovery, the cable television organization consisting of TNT, Animal Planet and CNN will be housed in a system called Global Linear Networks.

Streaming platforms Max and Discovery+ will be under a different department together with movie studios, including Warner Bros Pictures and New Line Cinema.

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

"Streaming won as a habits," stated Jonathan Miller, primary executive of digital media investment business Integrated Media. "Now, it's winning as a service."

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's new business structure will separate growing studio and streaming possessions from rewarding but shrinking cable television TV organization, giving a clearer financial investment picture and likely setting the stage for a sale or spin-off of the cable system.

The media veteran and advisor forecasted Paramount and others may take a similar course.

CEO David Zaslav, a veteran deal-maker who led Discovery through its acquisition of Scripps Networks Interactive before getting the even bigger target, AT&T's WarnerMedia, is placing the business for its next chess move, composed MoffettNathanson expert Robert Fishman.

"The concern is not whether more pieces will be walked around or knocked off the board, or if further consolidation will take place-- it is a matter of who is the purchaser and who is the seller," wrote Fishman.

Zaslav signified that situation 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 debt consolidation.

Zaslav had actually taken part in merger talks with Paramount late in 2015, though an offer never emerged, according to a regulative filing last month.

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

"The structure modification would make it easier for WBD to sell its linear TV networks," eMarketer expert Ross Benes said, referring to the cable service. "However, finding a buyer will be difficult. The networks owe money and have no signs of development."

In August, Warner Bros Discovery composed down the worth of its TV assets by over $9 billion due to uncertainty around charges from cable and satellite distributors and sports betting rights renewals.

This week, the media company announced a multi-year deal increasing the total charges Comcast will pay to distribute Warner Bros Discovery's networks.

Warner Bros Discovery is wagering the Comcast contract, together with a deal reached this year with cable and broadband supplier Charter, will be a template for future settlements with suppliers. That could assist stabilize rates 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)