Warner Bros. Discovery (WBD) stock popped early Monday after the company announced plans to split into two independent, publicly traded companies, separating its streaming and studio assets from its global television networks business.
The company said the transaction, expected to close by mid-2026, is designed to unlock shareholder value by giving each business a sharper strategic focus, allowing them to be “faster and more aggressive” in pursuing opportunities.
Shares rose as much as 12% shortly after the opening bell before paring gains to around 7% in late morning trade.
David Zaslav, currently president and CEO of Warner Bros. Discovery, will lead the newly formed streaming and studios unit. Gunnar Wiedenfels, the company’s CFO, will become president and CEO of global networks. Both executives will remain in their existing roles until the separation is finalized.
“By operating as two distinct and optimized companies in the future, we are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today’s evolving media landscape,” Zaslav said in a statement.
The streaming and studios company will include HBO and HBO Max, along with Warner Bros. Television and Motion Picture Group, DC Studios, Warner Bros. Games, and other related assets.
The global networks company will house CNN, TNT Sports, Discovery, Discovery+, Bleacher Report, and a portfolio of free-to-air and digital channels across more than 200 countries and territories.
It will also retain up to a 20% stake in the streaming and studios business, which it plans to monetize in a tax-efficient way to help reduce its debt — the bulk of which will remain with global networks.
“We would not be surprised if WBD is able to find a third party that would be interested in the 20% Global Networks stake in Streaming & Studios,” KeyBanc analyst Brandon Nispel wrote on Monday. “We think this potential next transaction would help reduce Global Networks’ debt and unlock value for shareholders.”
Speculation about a breakup has been building over the past year as WBD struggles to cut down its $38 billion debt load, streamline operations, and reignite growth in an increasingly volatile media landscape. The company repaid $2.2 billion in debt during the first quarter, but financial pressures remain high.
Adding to the challenge is a sluggish dealmaking environment. Elevated interest rates and a tougher regulatory climate led to a sharp drop in media M&A activity last year. Hopes for a 2025 rebound have been clouded by fresh uncertainty tied to President Trump’s unpredictable tariff policies, while the Federal Reserve has signaled it won’t consider rate cuts until it sees more clarity on the economic outlook.
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