New Script for Media: Warner Bros Discovery split marks end of bundling era

Mumbai: Warner Bros Discovery’s decision to split into two separate entities, just three years after its headline-grabbing merger, reflects a broader dismantling of the old media conglomerate model where everything from streaming to cable to studios was bundled under one roof.

With streaming now the primary growth engine, companies are under pressure to separate their fast-growing digital verticals from slower legacy businesses such as linear TV, cable news, and broadcast, industry experts said.

The idea is to create leaner, more focused businesses that can compete more effectively in the crowded streaming space, be valued independently, and attract sharper investor interest, after years of eroding valuations.

“Given the rise of OTT platforms and the market dominance of Netflix, studios are being forced to rethink,” said Vivek Menon, managing partner at NV Capital, a debt fund focused on media and entertainment (M&E) industry. “They’re separating high-growth content and digital units from cable and traditional operations that are seeing only low-single-digit growth. Netflix’s valuation is setting the benchmark and everyone else is chasing it.”

The move by Warner Bros Discovery (WBD) to split its operations mirrors steps taken by other media giants like Comcast and Lionsgate.

In late 2024, Comcast spun off NBCUniversal cable networks, including CNBC, MSNBC, and SYFY into a separate public entity called Versant. Lionsgate followed suit in May by separating its Studio and Starz units.Analysts see the breakups as a response to slow breakdown of linear TV economics and rise of streaming as dominant consumption mode.According to Nielsen’s The Gauge report, streaming overtook the combined share of cable and broadcast in May 2025, accounting for 44.8% of total TV usage in the US.

WBD’s restructuring will create two standalone companies: one focused on streaming and studio operations including HBO Max, HBO, Warner Bros Pictures, and DC Studios; and another housing traditional networks like CNN, Discovery, and Cartoon Network.

CEO David Zaslav will lead the streaming-first unit, while the bulk of WBD’s $37 billion debt will sit with the legacy cable business.

To support the realignment, WBD has secured a $17.5-billion bridge loan and plans to buy back up to $14.6 billion in debt.

The cable unit, Global Linear Networks (GLN), will hold a 20 percent stake in the streaming entity, which can be monetised later.

“WBD’s linear struggles aren’t unique,” said Paul Erickson, principal analyst at technology research and advisory group Omdia. “Comcast and Lionsgate have done similar splits to create operational clarity and increase appeal for future deals or capital raises.”

Morgan Stanley called the WBD move long overdue. It valued the streaming and studios business at over $40 billion, using a 12x EV/Ebitda multiple, while GLN was assigned a 5x multiple and projected to carry negative equity due to its debt burden, even after factoring in its 20% stake in the digital business.

WBD has been cautious about its moves in India. After shelving plans to launch HBO Max as a standalone service, the company chose to license HBO content to what is now JioHotstar. Discovery+ remains WBD’s primary digital platform in India.

“Content investment is likely to become more intentional and less speculative, and global expansion will be pursued with closer scrutiny to ensure returns justify the investment,” said Erickson.

“WBD may continue focusing on expanding Discovery+ in India, whether or not the HBO Max launch remains on hold.”