Warner Bros. Discovery announced that it will separate its cable networks from its streaming and studio operations. By mid-2025, we’ll see two distinct operating units: Global Linear Networks and Streaming & Studios. CEO David Zaslav says this move is about “enhancing strategic flexibility” and unlocking shareholder value. Sounds good on paper, right? But peel back the layers, and this might be less about strategy and more about survival.
Here’s the play: WBD’s cable business—CNN, TNT, TBS, Food Network—is set to focus on profitability and cash flow, which is corporate speak for “keep the lights on while we figure this out.” Meanwhile, the studios and streaming division, housing Max and its content pipeline, will aim for growth. Investors seem thrilled—WBD stock jumped over 13% after the announcement. But critics, including media strategist Evan Shapiro, aren’t buying the hype.
Splitting the Baby
Evan Shapiro, media cartographer, didn’t mince words. On LinkedIn, he called the split a “huge white flag” and slammed Zaslav for copying Comcast’s “strategy-less” spinoff. His main argument? Max’s ecosystem depends heavily on the content and leverage from WBD’s cable networks. The synergy between cable and streaming has been a key strength for WBD in global markets and distribution deals, like the ones with Comcast and Charter. Splitting these assets risks breaking a system that still works—at least partially.
And let’s not forget the loss of NBA rights, which has already put a massive dent in the value of WBD’s cable networks. Without live sports as a hook, channels like TNT have less to offer in terms of ratings and ad dollars. Couple that with the cord-cutting thing and declining ad revenue, and you have a business that’s more liability than asset. Shapiro’s verdict? This split could end up melting the combined value of WBD’s assets faster than a popsicle on a summer sidewalk.
Why Did It Take So Long for Media Companies to Separate Linear Assets?
So why now? Why didn’t WBD—or Disney, Comcast, or Paramount—make this move sooner?
The answer boils down to one word: money. For years, cable networks were cash cows. Though subscribers trickled away, bundled distribution deals and steady ad revenue kept the lights on. These networks didn’t just fund content; they bankrolled the streaming revolution.
For WBD specifically, Max wouldn’t exist in its current form without the cable networks pumping out content like Friends, Succession, and Fixer Upper. Separating these businesses sooner would have been like pulling the rug out from under their feet. And then there’s the matter of debt—$50 billion, to be exact. Divorcing the steady cash flow of linear TV from streaming could have made the company’s balance sheet even shakier than it already was.
But the industry didn’t stand still. Cord-cutting accelerated, linear TV ad revenue nosedived, and competitors like Netflix continued gobbling up market share. The old model couldn’t keep up. Comcast spun off its cable networks, and Disney has hinted that its legacy TV assets might be expendable. Zaslav and his team likely saw the writing on the wall: either split now or risk losing more value.
Is This Just Rearranging Deck Chairs?
Sure, WBD’s restructuring might create “strategic flexibility,” but what does that even mean in practice? This is likely just a setup for future deals. WBD could clear the path for potential mergers or spinoffs by separating its businesses, like a tie-up with Comcast’s new “SpinCo” cable entity. The problem? History suggests these kinds of combos don’t magically fix what’s broken. If anything, they accelerate the decline of aging assets.
Meanwhile, Max still has a mountain to climb outside of the Miami-Fort Lauderdale area. Streaming growth is slowing across the board, and WBD is stuck in a market where even Netflix struggles to maintain its dominance. The stakes couldn’t be higher, and while the split might buy WBD some time, it’s hard to see how it solves their long-term challenges.
The Take
Warner Bros. Discovery’s decision to split its business is bold, but bold doesn’t always mean smart. On one hand, the restructuring gives the company room to maneuver in an evolving media landscape. On the other, it risks dismantling the synergies that have kept the company afloat. As WBD doubles down on its debt-laden strategy, investors and employees wonder if this is the masterstroke that saves the company.
