Shares jump 13% after restructuring statement

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

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Challenges seen in offering debt-laden linear TV networks

(New throughout, includes 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 TV companies such as CNN from streaming and studio operations such as Max, preparing for a possible sale or spinoff of its TV service as more cable television customers cut the cable.

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

Media business are thinking about alternatives for fading cable businesses, a longtime cash cow where revenues are wearing down as countless consumers accept streaming video.

Comcast last month revealed plans to divide most of its NBCUniversal cable networks into a new public company. The new company would be well capitalized and positioned to obtain other cable networks if the industry consolidates, one source informed Reuters.

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

"We strongly believe there is capacity for fairly large synergies if WBD's direct networks were integrated with Comcast SpinCo," wrote Ehrlich, using the market term for standard tv.

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

Under the new structure for Warner Bros Discovery, the cable television TV business 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 movie studios, including Warner Bros Pictures and New Line Cinema.

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

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

Brightcove CEO Marc DeBevoise stated Warner Bros Discovery's brand-new business structure will differentiate growing studio and streaming assets from lucrative however shrinking cable company, offering a clearer financial investment image and most likely setting the phase for a sale or spin-off of the cable unit.

The media veteran and advisor anticipated Paramount and others may take a similar course.

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

"The concern is not whether more pieces will be moved or knocked off the board, or if more consolidation will occur-- it is a matter of who is the purchaser and who is the seller," composed Fishman.

Zaslav signaled that scenario during Warner Bros Discovery's financier call last month. He stated he expected President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to media market combination.

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

Others injected a note of caution, keeping in mind 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 analyst Ross Benes stated, describing the cable service. "However, discovering a purchaser will be tough. The networks owe money and have no indications of growth."

In August, Warner Bros Discovery documented the value of its TV assets by over $9 billion due to uncertainty around fees from cable television and satellite suppliers and sports betting rights renewals.

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

Warner Bros Discovery is wagering the Comcast contract, together with an offer reached this year with cable television and broadband company Charter, will be a design template for future settlements with distributors. That might assist stabilize 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)