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Shares jump 13% after restructuring announcement

Follows course taken by Comcast's new spin-off company

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Challenges seen in selling debt-laden direct TV networks

(New throughout, includes information, background, comments from market insiders and analysts, updates share prices)

By Dawn Chmielewski, Deborah Mary Sophia and Aditya Soni

Dec 12 (Reuters) - Warner Bros Discovery on Thursday chose to separate its declining cable TV businesses such as CNN from streaming and studio operations such as Max, preparing for a prospective sale or spinoff of its TV organization as more cable television subscribers cut the cord.

Shares of Warner leapt after the business said the new structure would be more deal friendly and it anticipated to finish the split by the middle of 2025. Warner shares closed at $12.49, up more than 15%.

Media business are considering alternatives for fading cable television TV companies, a longtime cash cow where earnings are eroding as millions of customers accept streaming video.

Comcast last month revealed plans to split the majority of its NBCUniversal cable networks into a brand-new public company. The new business would be well capitalized and placed to acquire other cable television networks if the industry combines, one source informed Reuters.

Bank of America research study analyst Jessica Reif Ehrlich wrote that Warner cable television service assets are a "really rational partner" for Comcast's new spin-off company.

"We highly think there is potential for relatively sizable synergies if WBD's linear networks were combined with Comcast SpinCo," wrote Ehrlich, using the industry term for conventional tv.

"Further, our company believe WBD's standalone streaming and studio assets would be an appealing takeover target."

Under the brand-new structure for Warner Bros Discovery, the cable business consisting of TNT, Animal Planet and CNN will be housed in a system called Global Linear Networks.

Streaming platforms Max and Discovery+ will be under a separate department together with film studios, consisting of Warner Bros Pictures and New Line Cinema.

The restructuring reflects an inflection point for the media industry, as financial investments in streaming services such as Warner Bros Discovery's Max are lastly settling.

"Streaming won as a behavior," said Jonathan Miller, chief executive of digital media financial investment business Integrated Media. "Now, it's winning as a company."

Brightcove CEO Marc DeBevoise said Warner Bros Discovery's brand-new business structure will distinguish growing studio and streaming properties from profitable but diminishing cable company, providing a clearer financial investment photo and likely setting the stage for a sale or spin-off of the cable system.

The media veteran and adviser predicted Paramount and others may take a similar course.

CEO David Zaslav, a veteran deal-maker who led Discovery through its acquisition of Scripps Networks Interactive before getting the even bigger target, AT&T's WarnerMedia, is placing the company for its next chess move, wrote MoffettNathanson analyst Robert Fishman.

"The concern is not whether more pieces will be moved or knocked off the board, or if additional debt consolidation will take place-- it refers who is the buyer and who is the seller," composed Fishman.

Zaslav indicated that situation throughout Warner Bros Discovery's investor call last month. He stated he expected President-elect Donald Trump's administration would be friendlier to deal-making, opening the door to media industry combination.

Zaslav had participated in merger talks with Paramount late in 2015, though an offer never ever materialized, according to a regulatory filing last month.

Others injected a note of caution, noting Warner Bros Discovery brings $40.4 billion in debt.

"The structure change would make it simpler for WBD to sell its linear TV networks," eMarketer analyst Ross Benes stated, referring to the cable business. "However, finding a purchaser will be difficult. The networks owe money and have no signs of growth."

In August, Warner Bros Discovery made a note of the value of its TV assets by over $9 billion due to uncertainty around charges from cable and satellite distributors and sports betting rights renewals.

Today, the media business announced a multi-year offer increasing the overall charges Comcast will pay to disperse Warner Bros Discovery's networks.

Warner Bros Discovery is sports betting the Comcast contract, together with an offer reached this year with cable television and broadband supplier Charter, will be a design template for future settlements with distributors. That might help stabilize prices for the domestic pay TV market. (Reporting by Deborah Sophia and Aditya Soni in Bengaluru, Dawn Chmielewski in Los Angeles; Editing by Shilpi Majumdar, Arun Koyyur, Keith Weir and David Gregorio)