Shares dive 13% after reorganizing announcement

Follows path taken by Comcast's new spin-off company

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Challenges seen in offering debt-laden linear TV networks

(New throughout, adds information, background, comments from market experts and experts, updates share rates)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday decided to separate its declining cable television organizations such as CNN from streaming and studio operations such as Max, preparing for a potential sale or spinoff of its TV business as more cable customers cut the cord.

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

Media business are thinking about options for fading cable services, a long time golden goose where revenues are wearing down as millions of customers accept streaming video.

Comcast last month unveiled plans to split the majority of its NBCUniversal cable television networks into a brand-new public business. The new company would be well capitalized and placed to obtain other cable television networks if the market combines, one source told Reuters.

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

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

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

Under the new structure for Warner Bros Discovery, the cable television organization consisting of TNT, Animal Planet and CNN will be housed in a system called Global Linear Networks.

Streaming platforms Max and Discovery+ will be under a separate division together with movie studios, consisting of 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 finally paying off.

"Streaming won as a habits," said Jonathan Miller, president of digital media financial investment business Integrated Media. "Now, it's winning as a business."

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's new corporate structure will differentiate growing studio and streaming properties from profitable however diminishing cable television service, providing a clearer financial investment photo and most likely setting the stage for a sale or spin-off of the cable television unit.

The media veteran and adviser predicted Paramount and others might take a similar path.

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

"The question is not whether more pieces will be walked around or knocked off the board, or if additional debt consolidation will occur-- it refers who is the buyer and who is the seller," wrote Fishman.

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

Zaslav had engaged in merger talks with Paramount late in 2015, though an offer never ever emerged, according to a regulative filing last month.

Others injected a note of caution, noting Warner Bros Discovery carries $40.4 billion in financial obligation.

"The structure change would make it much easier for WBD to sell its direct TV networks," eMarketer expert Ross Benes said, describing the cable company. "However, discovering a buyer will be challenging. The networks are in financial obligation and have no signs of development."

In August, Warner Bros Discovery composed down the value of its TV assets by over $9 billion due to uncertainty around charges from cable and satellite distributors and sports betting rights renewals.

This week, the media business announced a multi-year offer increasing the general fees Comcast will pay to distribute Warner Bros Discovery's networks.

Warner Bros Discovery is wagering the Comcast agreement, together with a deal reached this year with cable and broadband supplier Charter, will be a template for future negotiations with suppliers. That could assist support rates 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)