Warner Bros Discovery announces plans of splitting into two companies

Warner Bros. Discovery is one of the global entertainment companies that creates and distributes the world's most differentiated and complete portfolio of content and brands across television, film, and streaming. In the latest development, the global media company has announced its plans to split into two companies.

Why Warner Bros. Discovery will be splitting into two?

On their official site, Warner Bros. Discovery has revealed their plans to separate the company into two publicly traded companies, enabling each to maximize its potential. The Streaming & Studios company will consist of Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, and HBO Max, as well as their legendary film and television libraries. Global Networks will include premier entertainment, sports, and news television brands around the world in the U.S., and Discovery, top free-to-air channels across Europe, and digital products such as the profitable Discovery+ streaming service and Bleacher Report (B/R).

David Zaslav, President and CEO of Warner Bros. Discovery, will serve as President and CEO of Streaming & Studios. Gunnar Wiedenfels, CFO of Warner Bros. Discovery, will serve as President and CEO of Global Networks. Both will continue in their present roles at WBD until the separation.

"The cultural significance of this great company and the impactful stories it has brought to life for more than a century have touched countless people all over the world. It's a treasured legacy we will proudly continue in this next chapter of our celebrated history," said Zaslav. “By operating as two distinct and optimized companies in the future, we are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today's evolving media landscape.”

In addition, "This separation will invigorate each company by enabling them to leverage their strengths and specific financial profiles. This will also allow each company to pursue important investment opportunities and drive shareholder value," said Wiedenfels. “At Global Networks, we will focus on further identifying innovative ways to work with distribution partners to create value for both linear and streaming viewers globally while maximizing our network assets and driving free cash flow.”

More details about the separation into two companies

Warner Bros. Discovery intends to separate the businesses in a tax-free manner for U.S. federal income tax purposes. The companies plan to implement arm's length transition services and commercial agreements post-separation to facilitate the transition and maintain continued operational efficiencies.

The separation is expected to be completed by mid-2026, subject to closing and other conditions, including final approval by the Warner Bros. Discovery Board, receipt of tax opinions, and/or a private letter ruling from the Internal Revenue Service concerning the tax-free nature of the transaction for U.S. federal income tax purposes, and market conditions.