Shares dive 13% after reorganizing announcement

Follows course taken by Comcast's new spin-off business

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Challenges seen in offering debt-laden direct TV networks

(New throughout, adds information, background, remarks from industry experts 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, laying the groundwork for a prospective sale or spinoff of its TV business as more cable customers cut the cord.

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

Media companies are thinking about choices for fading cable television TV organizations, a longtime golden goose where earnings are deteriorating as millions of customers accept streaming video.

Comcast last month unveiled plans to divide the majority of its NBCUniversal cable television networks into a new public business. The brand-new company would be well capitalized and positioned to acquire other cable television networks if the industry consolidates, one source informed Reuters.

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

"We highly think there is capacity for relatively substantial synergies if WBD's linear networks were combined with Comcast SpinCo," composed Ehrlich, using the industry term for traditional television.

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

Under the new structure for Warner Bros Discovery, the cable service consisting of TNT, Animal Planet and CNN will be housed in an unit called Global Linear Networks.

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

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

"Streaming won as a habits," stated Jonathan Miller, president of digital media investment company Integrated Media. "Now, it's winning as an organization."

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's brand-new business structure will differentiate growing studio and streaming assets from rewarding however diminishing cable television organization, providing a clearer financial investment picture and most likely setting the stage for a sale or spin-off of the cable television unit.

The media veteran and adviser anticipated Paramount and others might take a comparable course.

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

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

Zaslav signified that scenario during Warner Bros Discovery's financier call last month. He said he anticipated President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media industry consolidation.

Zaslav had actually participated 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 change would make it easier for WBD to sell its direct TV networks," eMarketer expert Ross Benes stated, describing the cable service. "However, finding a purchaser will be tough. The networks are in debt and have no indications of development."

In August, Warner Bros Discovery made a note of the value of its TV assets by over $9 billion due to unpredictability around fees from cable and satellite distributors and sports betting rights renewals.

Today, the media company revealed a multi-year deal increasing the general fees 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 company Charter, will be a design 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)