Warner Bros Discovery Inc. (NASDAQ:WBD) saw its shares rise by 4% following the announcement of a major overhaul in its corporate structure. The media conglomerate revealed plans to reorganize into two distinct operating divisions, a move intended to enhance strategic flexibility and potentially unlock additional value for shareholders.
The newly announced structure will see Warner Bros Discovery act as the parent company over two separate entities. The first division, Global Linear Networks, will encompass the company's linear television business, which includes a variety of networks known for news, sports, and both scripted and unscripted programming. The second division, named Streaming & Studios, will combine the company's streaming services with its film and entertainment studios, leveraging a rich portfolio of intellectual property.
This strategic realignment is expected to grant each division the clarity and focus needed to achieve their respective operational and strategic goals. The Global Linear Networks division will concentrate on maximizing profitability and generating free cash flow to further the company's deleveraging efforts. Meanwhile, the Streaming & Studios division will aim to drive growth and yield strong returns on invested capital.
David Zaslav, President and CEO of Warner Bros. Discovery, expressed confidence in the reorganization. He emphasized the transformation and financial improvement the company has undergone, as well as its commitment to delivering top-tier entertainment globally. Zaslav highlighted the new structure's alignment with the organization's objectives, enhancing the company's flexibility to capitalize on strategic opportunities in the dynamic media industry. The goal is to build on current momentum and explore all options to deliver significant shareholder value.
The foundational steps toward the new corporate structure are set to begin immediately, with the full implementation expected to be completed by mid-2025. The company also anticipates ongoing evolution of its Board to effectively execute its strategy and drive future shareholder value creation.
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