Warner Bros. Discovery Is Becoming Two Companies

Last month, one of the entertainment world’s most prominent rebrands got a new rebrand, with the streaming service then known as “Max” revealing that it was becoming “HBO Max” again. It was the latest in a series of dizzying moves for Warner Bros. Discovery under CEO David Zaslav, which also included shelving several completed movies and removing animation classics from the aforementioned streaming service.

What’s next for Warner Bros. Discovery? Turns out the next step for this company is becoming multiple companies. Not unlike Comcast spinning off its cable networks, WBD has something similar in mind. Vulture’s Eric Vilas-Boas has a good overview of the company’s plan to become two companies, and what the impact might be for your film and television viewing habits.

As Vilas-Boas explains, the two companies that are set to emerge are “Global Networks” and “Streaming & Studios.” Zaslav will head the latter; Warner Bros. Discovery Chief Financial Officer Gunnar Wiedenfels is set to take charge of the former. Most of the company’s cable channels (though not HBO) will be under the “Global Networks” banner; “Streaming & Studios” will include HBO and Warner Bros.’s film and television productions, as well as DC Studios (and DC Comics).

The change is set to be completed by the middle of next year.

Max Is Becoming “HBO Max” Again, Because of Course They Are

Warner Bros. Discovery announced the change during their upfront presentation on Wednesday

From a business perspective, there’s one immediately noticeable wrinkle in how the new companies will be set up: “Global Networks” is set to take on far more of Warner Bros. Discovery’s existing debt. As Tony Maglio wrote at The Hollywood Reporter, Wiedenfels confirmed this on a recent conference call.

“[I]t’s safe to assume that the majority of the debt is going to live with Global Networks and a smaller portion — but a not-insignificant portion — on Streaming & Studios as well,” Wiedenfels said. Maglio noted that the debt is currently $37 billion — something that will almost certainly have a big impact on these two new companies going forward.