Sky's deal with Warner Bros Discovery threatens streaming service stability

In recent months, Warner Bros. Discovery has faced significant challenges in the media landscape, leading to its decision to restructure. This corporate change aims to divide the company into two distinct divisions: Global Linear Networks and Streaming & Studios. This separation comes as a response to the declining performance of linear networks, which have been losing subscribers and advertising revenue. Additionally, the company has already taken a substantial write-down on its cable networks due to loss of content rights, notably live NBA games that transitioned to Amazon Prime Video. Warner Bros. Discovery's management believes that the restructuring will enhance strategic flexibility and create opportunities for greater shareholder value, positioning the streaming business as a growth driver. Plans are in place to finalize this new corporate structure by mid-2025, while ongoing discussions about potential mergers and acquisitions arise in light of the move. This shift also aligns with industry trends where traditional media companies are evaluating collaborations and reconsidering the viability of linear broadcasting as the focus shifts toward innovative streaming models. CEO David Zaslav emphasized that the restructuring is necessary to maintain free cash flow in the linear networks while the Streaming & Studios sector will concentrate on high-quality storytelling. Overall, the restructuring reflects a changing media environment, prompting Warner Bros. Discovery to adapt and pursue new avenues to enhance its competitive stance in an evolving landscape.