Shares jump 13% after restructuring statement

Follows course taken by Comcast's brand-new spin-off company

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Challenges seen in selling debt-laden direct TV networks

(New throughout, adds information, background, remarks from industry insiders and analysts, updates share costs)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday decided to separate its declining cable businesses such as CNN from streaming and studio operations such as Max, laying the foundation for a prospective sale or spinoff of its TV company as more cable subscribers cut the cable.

Shares of Warner jumped after the business said the 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 companies are thinking about choices for fading cable television TV services, a long time money cow where earnings are eroding as countless consumers accept streaming video.

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

Bank of America research analyst Jessica Reif Ehrlich composed that Warner Bros Discovery's cable possessions are a "extremely rational partner" for Comcast's brand-new spin-off business.

"We strongly believe there is potential for fairly sizable synergies if WBD's linear networks were combined with Comcast SpinCo," composed Ehrlich, utilizing the market 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 company 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 different department together with film studios, including Warner Bros Pictures and New Line Cinema.

The restructuring shows an inflection point for the media industry, as investments in streaming services such as Warner Bros Discovery's Max are lastly paying off.

"Streaming won as a habits," stated Jonathan Miller, primary executive of digital media investment firm Integrated Media. "Now, it's winning as an organization."

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's new business structure will distinguish growing studio and streaming assets from profitable but shrinking cable television TV business, offering a clearer financial investment image and most likely setting the stage for a sale or spin-off of the cable television unit.

The media veteran and consultant anticipated 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 obtaining the even bigger target, AT&T's WarnerMedia, is placing the company for its next chess move, wrote MoffettNathanson analyst Robert Fishman.

"The question is not whether more pieces will be moved or knocked off the board, or if further combination will take place-- it refers who is the purchaser and who is the seller," wrote Fishman.

Zaslav signaled that situation during Warner Bros Discovery's financier call last month. He said he anticipated President-elect Donald Trump's administration would be friendlier to deal-making, unlocking to media market consolidation.

Zaslav had actually taken part in merger talks with Paramount late in 2015, though a deal never materialized, according to a regulative filing last month.

Others injected a note of caution, noting Warner Bros Discovery brings $40.4 billion in debt.

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

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

Today, the media business revealed a multi-year deal increasing the overall fees Comcast will pay to distribute Warner Bros Discovery's networks.

Warner Bros Discovery is wagering the Comcast contract, together with a deal reached this year with cable and broadband supplier Charter, will be a design template for future negotiations with distributors. 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)