Warner Bros Discovery announced on Thursday that it will split its business units for television networks and streaming and studios into two separate entities. This move increases the likelihood of a possible breakup of the media giant, which includes HBO and CNN.

The announcement caused the company's shares to rise by up to 16 percent, reaching their highest level since late 2023 according to FactSet data. Nonetheless, the share price is still about 50 percent below the level of 2022, when Warner Media and Discovery merged.

As part of the restructuring, Warner Bros plans a "new corporate structure." The television network division will focus on maximizing profitability and free cash flow, while the streaming and studio unit is aimed at growth and high returns on invested capital.

This step follows a similar maneuver by rival Comcast, which announced last month that it would spin off its television networks like CNBC and MSNBC into a standalone company. These restructurings reflect the increasing pressure on traditional linear television, which once formed the foundation of the entertainment industry.

Bank of America analysts see the new structure of Warner Bros as an opportunity to facilitate future strategic steps, such as a spin-off of the streaming and studio units. These standalone assets could be extremely attractive to potential acquisition candidates.

As early as July, the Financial Times reported that Warner Bros had explored options to strengthen the stock price, including a possible spinoff of the streaming and studio business. The restructuring is to be completed by mid-2025. In parallel, Warner Bros plans changes in the board to further increase the company's value.

David Zaslav, CEO of Warner Bros, emphasized that the restructuring improves the company's flexibility in a changing media environment. In recent months, the company has already sold smaller assets to reduce its debt burden of more than 40 billion dollars.

The question of the future of traditional cable networks poses a major challenge for media companies. Warner Bros wrote down the value of its cable networks by $9.1 billion this year, underscoring the urgency of strategic change.