Warner Bros. Discovery (NASDAQ: WBD) has announced plans to separate into two publicly traded companies, with the streaming & studios company and global networks being the two entities. The separation is expected to be completed by mid-2026, subject to closing and other conditions.
David Zaslav, President and CEO of Warner Bros. Discovery, will serve as President and CEO of streaming & studios, while Gunnar Wiedenfels, the CFO of Warner Bros. Discovery, will serve as President and CEO of global networks.
The streaming & studios company will consist of various entities, including Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, HBO Max, Warner Bros. Games, tours, retail and experiences, and studio production facilities in Burbank and Leavesden. Currently, HBO Max is in 77 markets with new market launches planned for 2026.
On the other hand, global networks will include premier entertainment, sports and news television brands around the world, such as CNN, TNT Sports in the U.S., Discovery, top free-to-air channels across Europe, and digital products like Discovery+ and Bleacher Report (B/R).
The separation is expected to unlock value for shareholders and create opportunities for both new businesses to thrive by enabling each to be faster and more aggressive in pursuing opportunities that strengthen their competitive positions. It will also form world-class management teams focused on creating greater strategic flexibility and focus, and allow each company to attract a shareholder base aligned with its growth prospects and financial profiles.
Warner Bros. Discovery intends to separate the businesses in a tax-free manner for U.S. federal income tax purposes, and the companies plan to implement arm’s length transition services and commercial agreements post-separation to facilitate the transition and maintain continued operational efficiencies.
The company has also announced the commencement of tender offers and related consent solicitations across its existing capital structure to enhance its debt portfolio, which will be funded by a committed bridge facility of $17.5 billion provided by J.P. Morgan. Both companies will have a clear path to de-leveraging with significant cash flow and strong liquidity through cash and revolver availability. In addition, global networks will hold up to a 20% retained stake in streaming & studios that it plans to monetize in a tax-efficient manner to enhance the de-leveraging of its balance sheet.
J.P. Morgan and Evercore are serving as financial advisors to Warner Bros. Discovery, and Kirkland & Ellis LLP is serving as legal counsel.
The separation of Warner Bros. Discovery into two companies reflects the board’s ongoing efforts to evaluate and pursue opportunities that enhance shareholder value. Following these announcements, the company's shares moved 1.76%, and are now trading at a price of $9.82. If you want to know more, read the company's complete 8-K report here.
