Warner Bros. Discovery is making a big change. On November 29, 2023, CEO David Zaslav announced that the company will split into two separate entities. One will focus on streaming services and Hollywood studios, while the other will manage its cable networks. This decision comes as a response to the challenges of the digital age and pressures from investors.
Zaslav will lead the new streaming and studios company, which will include HBO Max and Warner Bros. film and television studios. The cable side, which encompasses CNN, TBS, TNT, and Discovery, will be overseen by Gunnar Wiedenfels, the current CFO of the corporation.
In his announcement, Zaslav emphasized the importance of Warner Bros. Discovery’s legacy and the need for both companies to concentrate on their unique markets. He believes that this split will allow them to better compete in today’s fast-changing media landscape.
This move marks a significant shift for Zaslav, who only three years ago completed a $43 billion acquisition of Warner Media to form Warner Bros. Discovery. At that time, he envisioned a company that could rival major streaming players like Netflix and Disney+. However, the combined company has struggled, accumulating over $50 billion in debt, and has seen its market value drop by nearly half since the merger.
The split is expected to close by mid-2024, pending approval from the U.S. Internal Revenue Service. This change raises questions about the future of CNN and other cable properties. Some industry experts speculate that smaller companies or private equity firms may be interested in acquiring these assets.
As Warner Bros. Discovery prepares for this new chapter, the focus will be on building its streaming subscriber base while also producing content for its competitors. This strategy reflects the ongoing challenges in the media industry as companies adapt to the demands of viewers in an increasingly digital world.