Shares dive 13% after restructuring statement

Follows path taken by Comcast's new spin-off company

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Challenges seen in selling debt-laden linear TV networks

(New throughout, adds information, background, comments from industry insiders and experts, updates share costs)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday decided to separate its decreasing cable television businesses such as CNN from streaming and studio operations such as Max, preparing for a prospective sale or spinoff of its TV business as more cable customers cut the cord.

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

Media business are considering options for fading cable organizations, a long time money cow where profits are wearing down as countless customers embrace streaming video.

Comcast last month revealed plans to divide many of its NBCUniversal cable television networks into a new public company. The new company would be well capitalized and placed to get other cable television networks if the market combines, one source informed Reuters.

Bank of America research expert Jessica Reif Ehrlich wrote that Warner Bros Discovery's cable possessions are a "extremely sensible partner" for Comcast's new spin-off company.

"We strongly believe there is potential for fairly sizable synergies if WBD's linear networks were integrated with Comcast SpinCo," composed Ehrlich, utilizing the market term for traditional television.

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

Under the brand-new structure for Warner Bros Discovery, the cable service including 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 along with film studios, including Warner Bros Pictures and New Line Cinema.

The restructuring shows an inflection point for the media market, as financial investments in streaming services such as Warner Bros Discovery's Max are finally settling.

"Streaming won as a habits," said Jonathan Miller, chief executive of digital media investment firm Integrated Media. "Now, it's winning as a company."

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's new corporate structure will distinguish growing studio and streaming properties from successful however shrinking cable TV service, giving a clearer investment picture and most likely setting the stage for a sale or spin-off of the cable television unit.

The media veteran and consultant predicted Paramount and others may take a comparable path.

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 positioning the company for its next chess relocation, wrote MoffettNathanson expert Robert Fishman.

"The question is not whether more pieces will be moved around or knocked off the board, or if further debt consolidation will happen-- it refers who is the purchaser and who is the seller," wrote Fishman.

Zaslav signaled that situation during Warner Bros Discovery's investor call last month. He said he prepared for President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to media industry debt consolidation.

Zaslav had participated in merger talks with Paramount late last year, though a deal never ever emerged, according to a regulatory filing last month.

Others injected a note of caution, keeping in mind Warner Bros Discovery carries $40.4 billion in debt.

"The structure change would make it easier for WBD to offer off its linear TV networks," eMarketer analyst Ross Benes said, describing the cable organization. "However, finding a purchaser will be challenging. The networks owe money and have no indications of development."

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

This week, the media company revealed a multi-year deal increasing the overall fees Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is sports betting the Comcast contract, together with a deal reached this year with cable and broadband provider Charter, will be a template for future negotiations with suppliers. That could help stabilize prices 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)