By Warner Bros. Discovery has reportedly discussed a plan to potentially split its digital streaming and studio businesses from its legacy television networks (ie. CNN, HBO) according to a surprising report in The Financial Times.
Their sources indicate WBD chief David Zaslav is examining several strategic options to boost the company’s sagging share price.
This could include selling assets to hiving off its Warner Bros movie studio and Max streaming service into a new company unburdened by the $39 billion net debt load WBD currently has.
Their sources also indicate people close to WBD have informally approached advisers to rival media groups to potentially explore M&A options with some of its existing assets.
They add WBD could still ultimately decide to continue operating as it is currently structured, but a break-up seems strongest option with the debt mostly remaining with the mature pay-TV networks business should that happen.
However they add that management is aware of the risk of crossing creditors. The company has a current market capitalisation of $20 billion – down a full one-third from a year ago. Shares have fallen by 70% since AT&T spun off Warners and it merged with Discovery two years ago.
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