Warner Bros. Discovery Plans Split of Cable, Streaming Operations

Warner Bros. Discovery is reportedly considering a strategic split that would separate its linear cable networks from its studio and streaming service, Max, aiming to streamline operations and unlock shareholder value. This potential restructuring follows a quarterly earnings report where revenue fell short of estimates, but the streaming segment showed strong growth, adding 5.3 million subscribers in Q1 and ending with 122 million total. Analysts maintain an optimistic outlook for the company, with a consensus 'Outperform' rating and price targets indicating significant upside potential. The company has already prepared for this split by separately reporting financials for streaming, studios, and linear segments, signaling that an announcement could come soon. Key concerns remain around how debt would be apportioned between the two entities, given the current leverage levels and the continued decline in linear cable revenue. Overall, investors have responded positively to the news, driving a rise in Warner Bros. Discovery's stock despite the recent revenue miss.