Warner Bros. Discovery’s split is the latest twist in media’s never-ending merger and spin
June 9, 2025
Warner Bros. Discovery’s (WBD) announcement that it will separate into two publicly traded companies by mid-2026 is a significant move for a company formed just over three years ago. But it’s hardly a new one in the media industry.
Over the past two decades, media giants have repeatedly turned to corporate breakups and restructurings as a strategic response to changing business models and mounting pressure from investors.
Warner Bros. Discovery’s history dates back more than two decades to the ill-fated merger of AOL and Time Warner in 2001. At the time, the $165 billion deal was hailed as the future of digital-media convergence. Instead, it quickly became one of the most infamous mergers in corporate history, plagued by culture clashes, collapsing valuations, and the bursting of the dot-com bubble.
AOL was eventually spun off in 2009. Time Warner would go on to shed more of its assets before getting acquired by AT&T (T) in 2018, only for AT&T to unwind that deal just three years later by merging WarnerMedia with Discovery in 2021 to form Warner Bros. Discovery.
That brings us to today, when WBD is once again heading for a split, reflecting the ongoing challenges facing large media conglomerates trying to balance legacy assets with the evolving streaming landscape.
The breakup will create two companies, one focused on streaming and studios, including properties such as HBO and DC Studios, and the other on global television networks such as CNN, TBS, TNT, HGTV, and the Food Network. The global networks entity will hold up to a 20% stake in the streaming company that it will use to pay down its debt.
Other major media players have followed similar paths of splitting — and in some cases, reuniting.
Viacom, which merged with broadcaster CBS in a $35.6 billion deal back in 1999, split in 2006 to create separate broadcast and cable media entities. But the two companies reunited in 2019 under the name ViacomCBS, only to rebrand again as Paramount Global (PARA) in 2022.
Now, Paramount is preparing to finalize its merger with Skydance Media in the second half of this year as it works to reshape its business following years of swirling sale rumors and prolonged corporate governance drama that stretches back more than a decade.
Similarly, News Corp. (NWSA) split in 2013, forming two separate companies: a publishing-focused entity that retained assets like “The Wall Street Journal” and “New York Post” and an entertainment business that housed the Fox broadcast network and the storied 20th Century Fox film studio.
That entertainment arm was eventually dismantled as part of one of the largest media acquisitions in history, when Disney acquired 20th Century Fox in 2019.
Following the deal, the remaining assets not sold to Disney were spun off into a new entity called Fox Corporation (FOXA), which retained Fox News, Fox Sports, and the Fox broadcast network. The free, ad-supported streaming service Tubi was acquired after the spin-off as part of Fox’s push into digital media.
These repeated cycles of mergers, splits, and rebrands underscore a key lesson in media: Scale alone doesn’t guarantee success, especially for an industry that’s at the mercy of rapidly shifting consumer habits, evolving technology, and fierce competition.
As these habits continue to evolve, companies are increasingly recognizing the need to streamline operations, focus on core strengths, and adapt swiftly. This often means undoing past mega-mergers to build more agile, focused companies.
“There’ll be a great shedding first, and then there’ll be a reconnecting of other things,” Starz (STRZ) CEO Jeff Hirsch told Yahoo Finance last week.
The newly independent premium cable and streaming network, which began trading on the Nasdaq last month after spinning off from Lionsgate Studios, is positioning itself to potentially acquire distressed assets and offer technology support to traditional media companies caught flat-footed by the streaming revolution.
“A lot of folks are inward-looking and trying to figure out who they are and what they do well,” Hirsch said, a nod to the strategic soul-searching happening across the industry. “Once they figure that out, then I think they’ll shed assets.”
That shift is already beginning to materialize for much of legacy media, which has heavily invested in costly streaming ventures amid the mass exodus of pay-TV consumers.
Outside of WBD, Comcast (CMCSA) announced plans to spin off most of its cable properties into a new company, Versant, later this year. Disney (DIS) has also explored options to divest its linear networks, including ABC, FX, and National Geographic. While CEO Bob Iger has since walked back those comments, analysts say a sale or spin-off could still resurface.
“[WBD split] won’t be the last,” Paul Verna, vice president of content at Emarketer, said on Monday. “The diverging fortunes of streaming and traditional pay TV have been unmistakable for years, so it was only a matter of time before the dominoes started falling.”
Allie Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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