Sounds Like Warner Bros. Discovery Will Have Its Own SpinCo in the “Not-Too-Distant” Future

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It sounds like Discoveryco. may be a reality.

Warner Bros. Discovery appears to be preparing for a division, according to CNBC’s David Faber in a recent report. This revelation was made shortly after the company released its quarterly earnings and discussed them with financial analysts. Faber further mentioned that based on his numerous discussions, it seems likely that an announcement regarding the potential separation of the company could come within a short period, hinting at their intention to divide the company.

According to Faber, it seems highly likely that Warner Bros. studios will join forces with Max, which might marginalize WBD’s cable networks in the process. This scenario mirrors the approach NBCUniversal has taken towards Faber.

A representative from Warner Bros. Discovery didn’t give an immediate response to The Hollywood Reporter when they requested a comment regarding the Faber report.

NBCUniversal is transferring most of its cable properties, excluding Bravo but including CNBC, into a newly formed company called Versant (formerly known as “SpinCo.”) under the leadership of Mark Lazarus. This new entity will also encompass digital assets such as Golf Now, Rotten Tomatoes, and Fandango. Following the unveiling of SpinCo., there has been speculation among media analysts and reporters about when Warner Bros. Discovery and Skydance Paramount might follow suit, after their respective mergers are approved. Bob Iger, CEO of Disney, had expressed in July 2023 that legacy TV networks like ABC may not be central to the company; however, he later retracted this statement.

In December, Warner Bros. Discovery started reorganizing its business setup into a worldwide linear TV sector, distinct from its streaming and studio sector. This new arrangement aims to enhance “tactical agility” and potentially generate more chances to increase shareholder worth, as stated in a company filing at the time. The project is projected to be finished by mid-2025; we’re now approaching that timeframe.

Faber stated, “They’ve completed all the necessary reallocation, and I should add that in their latest financial report, they separate each segment into distinct financials for the first time. Typically, this is a sign, isn’t it? Streaming now has its own section, studios, global linear segments, and network segment as well.”

(The aim here was to make the sentence more conversational and easier to read while maintaining the original meaning.)

So, what’s keeping WBD busy right now? They are in the process of distributing around $35 billion in debt across Warner Bros. core and Discovery businesses.

“It will take quite some time to actually happen,” Faber said.

Warner Bros. Discovery (WBD) came into existence merely a handful of years back, resulting from the merger of David Zaslav’s Discovery, Incorporated and WarnerMedia, which was previously owned by AT&T.

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2025-05-08 18:24