Shares dive 13% after reorganizing statement

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

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Challenges seen in selling debt-laden direct TV networks

(New throughout, includes information, background, comments from market insiders and experts, updates share costs)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday chose to separate its declining cable companies such as CNN from streaming and studio operations such as Max, preparing for a possible sale or spinoff of its TV organization as more cable subscribers cut the cable.

Shares of Warner jumped after the business said 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 business are thinking about choices for fading cable television TV businesses, a long time golden goose where earnings are eroding as millions of customers accept streaming video.

Comcast last month unveiled plans to split most of its NBCUniversal cable networks into a new public business. The new company would be well capitalized and positioned to get other cable television networks if the market consolidates, one source informed Reuters.

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

"We strongly think there is potential for relatively substantial synergies if WBD's linear networks were integrated with Comcast SpinCo," composed Ehrlich, utilizing the market term for traditional tv.

"Further, we think WBD's standalone streaming and studio properties would be an attractive takeover target."

Under the new structure for Warner Bros Discovery, the cable television 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 together with movie studios, including Warner Bros Pictures and New Line Cinema.

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

"Streaming won as a behavior," said Jonathan Miller, primary executive of digital media investment firm Integrated Media. "Now, it's winning as a business."

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's brand-new business structure will differentiate growing studio and streaming properties from profitable but shrinking cable television business, providing a clearer financial investment photo and most likely setting the stage for a sale or spin-off of the cable television system.

The media veteran and consultant anticipated 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 obtaining the even larger target, AT&T's WarnerMedia, is positioning the business for its next chess relocation, wrote MoffettNathanson analyst Robert Fishman.

"The question is not whether more pieces will be moved or knocked off the board, or if more debt consolidation will take place-- it is a matter of who is the purchaser and who is the seller," composed Fishman.

Zaslav signaled that circumstance throughout Warner Bros Discovery's financier call last month. He stated he prepared for President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to media market combination.

Zaslav had participated in merger talks with Paramount late in 2015, though an offer never emerged, according to a regulatory 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 offer off its direct TV networks," eMarketer analyst Ross Benes said, referring to the cable service. "However, discovering a buyer will be difficult. The networks are in financial obligation and have no indications of growth."

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

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

Warner Bros Discovery is sports betting the Comcast contract, together with an offer reached this year with cable television and broadband supplier Charter, will be a template for future negotiations with suppliers. That could assist support 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)