Warner Bros. Discovery to Split into Two Public Companies by 2026

Warner Bros. Discovery announced a corporate plan to split into two publicly traded companies through a tax-free transaction. The resulting entities will be "Streaming and Studios," which will consolidate content creation and direct-to-consumer streaming assets, and "Global Networks," which will manage linear television networks and their associated digital products worldwide.

The primary justification for this strategic restructuring is to allow greater operational focus and agility in a media market that is constantly evolving. "By operating as two distinct and future-optimized companies, we are empowering these iconic brands with the sharpest focus and strategic flexibility they need to compete more effectively in today’s changing media landscape," says David Zaslav, President and CEO, Warner Bros. Discovery.

The decision to segment Warner Bros. Discovery comes three years after the merger that combined the assets of WarnerMedia and Discovery, Inc. This merger created a media conglomerate of vast scale but also considerable operational complexity. The media industry landscape is characterized by a split between two business models with different financial and strategic profiles. On one hand, the streaming business, which requires high investment in content and technology to drive subscriber growth. On the other hand, the linear television business, which generates significant and stable free cash flows, Accenture reports.

This separation aims to align the corporate structure with this market reality. By creating two entities Warner Bros. Discovery intends to unlock value for shareholders. Investors will be able to choose between two distinct investment profiles: Streaming and Studios as a long-term growth opportunity and Global Networks as a value-generating and cash flow asset. According to Samuel Piazza, Chairman of the Board, Warner Bros. Discovery, this transaction results from ongoing evaluation to "identify the best strategy to realize the full value of our exciting asset portfolio."

Details on Structure and Assets of the New Companies

Streaming and Studios will position itself as a company focused on content creation and distribution. Its portfolio will include Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, and the streaming service HBO Max. It will also control film and television libraries, Warner Bros. Games, and assets related to tours, retail, and experiences, along with production facilities in Burbank and Leavesden. The strategic objective will be the global expansion of HBO Max, which now operates in seventy-seven markets with plans for launches in new territories by 2026, and to reach at least US$3 billion in adjusted annual EBITDA for the studios.

Global Networks will manage a global portfolio of entertainment, sports, and news television networks. It will include brands such as CNN, TNT Sports in the US, Discovery, and broadcast television channels in the European Union. It will also cover profitable digital products such as the streaming service Discovery+ and the platform Bleacher Report (B/R). This entity’s strength lies in its reach — 1.1 billion unique viewers in 200 countries and 68 languages — and its industry-leading operating margins. Its focus will be maximizing the value of linear assets, investing in international growth opportunities, and expanding the digital extensions of its brands.

The transaction will be structured to be tax-free for US federal income tax purposes. To optimize its debt structure, Warner Bros. Discovery has initiated tender offers financed by a committed US$17.5 billion bridge credit facility provided by J.P. Morgan, expected to be refinanced before the separation. Global Networks will retain an ownership interest of up to 20% in Streaming and Studios, which it plans to monetize in a tax-efficient manner to accelerate its own debt reduction.

The separation process is expected to conclude by mid-2026. Completion is subject to several conditions, including final approval by Warner Bros. Discovery’s board of directors, receipt of favorable tax opinions or a private letter ruling from the Internal Revenue Service regarding the tax-free nature of the transaction, and market conditions.