Warner Bros. Discovery (WBD) stock jumped as much as 6% on Thursday amid continued speculation of a company breakup.
CNBC’s David Faber said on air that an announcement could come “in the not-too-distant future,” suggesting WBD may be preparing to fully separate its declining linear cable networks from its studio and streaming businesses.
Warner Bros. did not immediately respond to Yahoo Finance’s request for comment.
There have been some hints at a future split. Last year, WBD said it would undergo a corporate restructuring to separate its legacy networks, including CNN, TBS, TNT, HGTV, and the Food Network, from growth drivers like studios and its streaming platform Max.
That restructuring is expected to be completed in mid-2025.
“They’ve already done all of the reapportioning necessary,” Faber said, pointing out that, for the first time, the company broke out each business segment in its Q1 earnings report, released before the bell on Thursday. According to him, that’s usually a sign that a split may be on the horizon. Still, he added, “When will that come? How will it come? That, of course, remains the question.”
Speculation about a breakup has intensified over the past year as the media conglomerate struggles to reduce debt, streamline operations, and reignite growth in a rapidly evolving media landscape. Currently, WBD has about $38 billion in total debt after repaying $2.2 billion in debt during the first quarter.
Against this backdrop of financial pressure and industry transformation, broader market dynamics have also weighed on media dealmaking.
Last year saw crimped deal volumes as interest rates remained elevated and an unfavorable regulatory environment dampened sentiment. While there was optimism that 2025 could spark a rebound, President Trump’s unpredictable tariff policies have added uncertainty to the outlook.
At the same time, interest rates remain stubbornly high, with the Federal Reserve signaling it will wait for greater economic clarity before considering any cuts.
Read more about Warner Bros. Discovery’s stock moves and today’s market action
While the future remains unclear, some strategic shifts are already underway. Late in 2024, Comcast (CMCSA) said it would spin off most of its cable properties into a new company, recently named Versant.
Wall Street analysts suggest Comcast’s soon-to-launch spinoff, expected to debut by year’s end, could acquire other beaten-down cable properties, describing it as a positive development for competitors exposed to traditional networks, such as WBD.
