Warner Bros. Discovery confirmed plans to separate the company into two publicly traded entities through a tax-free transaction, 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, including CNN, TNT Sports 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).
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.
Each company will have well-capitalized structures to support its business. In a separate press release today, Warner Bros. Discovery announced the commencement of tender offers and related consent solicitations across its existing capital structure to enhance its debt portfolio, which will be funded by a committed bridge facility of $17.5 billion provided by J.P. Morgan. The bridge facility is expected to be refinanced prior to the separation. Both companies will have a clear path to de-leveraging with significant cash flow and strong liquidity through cash and revolver availability. In addition, Global Networks will hold up to a 20% retained stake in Streaming & Studios that it will plan to monetize in a tax-efficient manner to enhance the de-leveraging of its balance sheet. J.P. Morgan and Evercore are serving as financial advisors to Warner Bros. Discovery and Kirkland & Ellis LLP is serving as legal counsel.
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.”
“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.”
“We committed to shareholders to identify the best strategy to realize the full value of our exciting portfolio of assets, and the Board believes this transaction is a great outcome for WBD shareholders,” added Samuel A. Di Piazza, Jr., Chair of the Warner Bros. Discovery Board of Directors. “This announcement reflects the Board’s ongoing efforts to evaluate and pursue opportunities that enhance shareholder value.”
Building on the achievements realized over the past three years, the planned separation will unlock value for shareholders as well as create opportunities for both new businesses to thrive by equipping each to be faster and more aggressive in pursuing opportunities that strengthen their competitive positions, forming world-class management teams focused on creating greater strategic flexibility and focus so that each business can invest in and pursue its operational and financial goals, and enabling each company to be more agile and attract a shareholder base aligned with its growth prospects and financial profiles.
Streaming & Studios will be comprised of Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO and HBO Max (including its international sports offering), Warner Bros. Games, Tours, Retail and Experiences, as well as studio production facilities in Burbank and Leavesden. Streaming & Studios will have dynamic and sustainable revenue, profit and free cash flow growth. The company will focus on continuing to scale HBO Max, which is now in 77 markets with important new market launches planned for 2026, and build on its global momentum, investing in HBO’s world-class programming which differentiates and drives the platform, and prioritizing the operating principles that have put the Studios on a path back to their target of at least $3 billion in annual adjusted EBITDA.
Global Networks will encompass a powerful and preeminent global portfolio of entertainment, sports, and news television networks and brands as well as their digital products. Today, these assets reach 1.1 billion unique viewers in 68 languages across 200 countries and territories, while operating with industry-leading margins and robust free cash flow conversion. As a worldwide leader in live television, Global Networks will have the expertise, reach and ongoing financial profile to pursue opportunities such as investing in international growth opportunities, elevating its live content offerings in sports and news, and growing digital extensions of its strong network brands, such as Discovery+, B/R, and CNN’s new streaming offering.
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