And so, it happened. Entertainment giant Warner Bros Discovery (WBD) has followed Comcast (CMCSA) down the spinoff rabbit hole and announced a plan to spin off its linear television operations, making them separate from the streaming units. Shareholders were over the moon and launched shares higher in Thursday afternoon’s trading.
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In this move, Warner will see its panoply of television channels—including CNN, the old Turner channels (TBS and TNT), and HGTV, among others—separated into their own unit. Meanwhile, streaming content, like Max, will be incorporated into the studios unit. Interestingly, despite the fact that HBO is a linear channel, it will also be part of the streaming/studios unit, noted a report from CNBC.
CEO David Zaslav offered up a statement about the move, saying, “We continue to prioritize ensuring our Global Linear Networks business is well positioned to continue to drive free cash flow, while our Streaming & Studios business focuses on driving growth by telling the world’s most compelling stories.” The move will take time, however, as it is not expected to be complete before the summer of 2025.
…And Speaking of Comcast
If this move sounds a lot like what Comcast just did a few weeks back, you are absolutely not alone in thinking that. However, there are some signs that the move is part of a larger play to work with Comcast. A new multi-year distribution deal, noted CBR.com, will see Warner content—including TBS, TNT, and Discovery—on Xfinity TV for some time to come.
Xfinity will get the channels, as will Sky in the United Kingdom. Financial terms, however, were kept quiet. And HBO, meanwhile, will prove an exception once again: HBO will continue to be part of the Xfinity lineup. Further, Comcast gets to add both Max and Discovery+’s ad-supported versions to the Xfinity streaming system, which gives Comcast more options and more value in the field.
Is WBD Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on WBD stock based on 10 Buys, six Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 5.22% rally in its share price over the past year, the average WBD price target of $12.50 per share implies 0.81% upside potential.
