Warner Bros. Discovery to Split Into Two Companies, Assigns Bulk of Debt to Linear TV Business

Move separates declining pay-TV assets from streaming and studio operations as company prepares to restructure billions in debt and focus on long-term digital growth

Warner Bros. Discovery (WBD) will split into two publicly traded entities by mid-2026, separating its higher-growth, subscription-driven streaming and studio assets from its slower-growth, debt-laden linear TV operations.

Here’s how the company is dividing the business:

StudioCo (Growth-Oriented)	NetworksCo (Legacy-Focused) (Referred to in the press release as “Global Streaming & Games Co.,” though it includes primarily linear TV assets.)
Streaming Services: Max	Linear TV Networks: Discovery, Discovery+, HGTV, Food Network, TLC, ID, Travel Channel, CNN
Studios: Warner Bros. Pictures, HBO, DC Studios, New Line Cinema	Some Potential Gaming Assets: WB Games, may be split
Focus: Subscription growth, DTC monetization, IP development	Focus: Cash flow management, debt servicing
Debt Load: Light	Debt Load: Heavy (inherits bulk of $34B+)
Strategic Role: High-growth business with capital flexibility	Strategic Role: Manage decline, reduce liabilities
Valuation Goal: Public market clarity for DTC assets	Potential: Consolidation with other legacy TV assets

“We believe this is the best structure to capitalize on the evolving media landscape,” said David Zaslav, President and CEO of Warner Bros. Discovery. “It will give each company the flexibility to pursue its own strategic priorities and growth opportunities.”

To facilitate the transition, Warner Bros. Discovery has secured a $17.5 billion bridge loan from J.P. Morgan to refinance near-term maturities. The company plans to assign most of its existing $34.6 billion in net debt to NetworksCo, while retaining up to 20% ownership in StudioCo, with the intent to monetize that stake over time to further reduce debt.

INSIDER TAKE

A Clearer Bet on Streaming, and a Playbook for Others

This bold split reflects a growing trend among media and subscription businesses: separating declining cash-cow operations from high-growth digital bets to unlock value and restore investor confidence.

Subscription businesses require strategic focus: By ring-fencing Max in StudioCo, WBD can prioritize DTC innovation, pricing strategy, bundling, and churn reduction, free from the financial drag of cord-cutting and legacy infrastructure.
Deleveraging matters: High debt has constrained WBD’s ability to invest in content and compete with Netflix and Disney. Unloading debt to the linear business gives StudioCo more agility—an approach subscription CFOs across industries may want to watch.
Linear is no longer strategic: Positioning NetworksCo as the debt carrier is a signal that linear TV is a mature, non-core asset. Its function going forward may be to generate cash, manage decline, and eventually consolidate with other similar portfolios.
Public market clarity: Investors have struggled to evaluate streaming businesses tangled in mixed business models. This move creates the potential for StudioCo to be valued based on its own subscription performance, specifically retention, ARPU, and subscriber growth, similar to its peers, such as Netflix.

The bottom line? Warner Bros. Discovery is making a clean break. For subscription executives, the lesson is clear: structure matters, and in today’s environment, clarity and capital flexibility can be a competitive edge.

Filed in Business Strategy, Direct-to-Consumer, Entertainment and Streaming, Industry Announcements, Mergers and Acquisitions, News

Kathleen Greenler Sexton

Kathy Greenler Sexton is a recognized authority on digital subscription business models, market strategy, and operational excellence. As CEO & Publisher of Subscription Insider, Kathy leads the charge in delivering actionable insights that empower businesses to thrive in the subscription economy. With a proven track record of driving growth and successful exits at companies like Individual.com and HighBeam Research, Kathy has also played key roles in launching and scaling prominent digital brands, including AltaVista. Previously, she led the SIIA Content Division as VP & General Manager, where she expanded membership, revenue, and influence while helping businesses adapt to transformative shifts in technology and content. A frequent speaker at industry conferences, Kathy brings invaluable expertise and a forward-thinking perspective to the evolving world of subscriptions. She resides in Greater Boston with her family and is an avid skier and devoted Boston sports fan.

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