On Monday, three years after WarnerMedia was spun off from AT&T and merged with Discovery to form Warner Bros. Discovery, the company announced that it was splitting back apart. WBD will split into a “Streaming and Studios” company consisting of the various studios, mostly Warner Bros-branded but also including DC Studios, as well as HBO and the streaming service about to be re-renamed back to HBO Max, and a “Global Networks” company with all of the current WBD’s non-HBO linear networks as well as the discovery+ streaming service.
This comes on the heels of Comcast announcing its plans to split off most of its linear cable networks (except Bravo) to a new company to be called Versant, and it might seem like WBD is playing follow-the-leader, splitting off everything that’s not actively contributing to its streaming business to get its fading linear cable businesses off the books. But there are some key differences. Most of the networks Comcast is spinning off don’t really provide much value on their own; USA airs sports content but most of it was purchased by NBCUniversal, usually with NBCSN being the originally intended cable outlet, and will now effectively be sublicensed out to Versant, and NBCU’s most recent major sports rights deals with the Big Ten and NBA have left out USA entirely in favor of signing rights for the NBC broadcast network and Peacock alone. Very few Versant outlets air much in the way of truly original programming, at least outside cheap true crime documentaries; the main outlets producing real value on their own would probably be CNBC and MSNBC.
That is not the case with the WBD split. While Comcast is keeping all of NBC Universal’s sports rights, the sports rights WBD holds under the TNT and Eurosport banners will be going with the “Global Networks” division, which I’ll be referring to as “Turner Discovery” for the rest of this post while referring to “Streaming and Studios” as “Warner Bros.” CNN is still a going concern and arguably still a stronger news brand than MSNBC, plus there’s all the documentary and reality programming from the Discovery networks and kids’ and other animated programming on Cartoon Network. (In fact, there’s an open question as to whether or not Cartoon Network will really be separated from the studio that effectively produces all of its programming – and it’s an especially pressing question at Adult Swim, which effectively is Williams Street, the studio that not only produces all of its original programming but runs the network/block.) All of this would be valuable content for any streaming service; indeed, Turner Discovery will not only be coming with an existing streaming service in discovery+, but is working on a new one for CNN.
The problem is, though, it hasn’t added that much value to Max. WBD chair David Zaslav has admitted that sports has not been a major driver of Max sign-ups (unlike with Peacock), and Max’s failure to gain traction in the kids-and-family space has raised questions about the future of Cartoon Network more generally and led them to not only strip Max of most kids’ content in favor of continuing to license to outside streamers, but increasingly, to produce new kids’ series for those streamers as well. The rebrand back to HBO Max is effectively an admission that the one thing that actually has provided value to the service has been the sort of prestige TV and movies that have long been HBO’s bread and butter, and this split is effectively an announcement that WarnerMedia intends to focus the service on those things nigh-exclusively.