• Warner Bros. Discovery — the brainchild of media mogul David Zaslav — is splitting up.
• Wall Street had long questioned the wisdom of WBD, and Zaslav now seems to agree.
• While this spinoff was predictable, it sparks questions for other media companies.

The ill-fated marriage between Warner Bros. and Discovery is heading for divorce — and Wall Street is cheering.

Warner Bros. Discovery on Monday announced plans to split its declining TV networks from its growing streaming and studios business. This spinoff proposal comes three years after WBD's inception. If all goes well, the spinoff will happen in mid-2026.

WBD CEO David Zaslav will oversee the sexier streaming part, while CFO Gunnar Wiedenfels — known for delivering "synergies" — will be in charge of the shrinking networks. WBD isn't alone, as Comcast is also splitting from most of its cable assets.

By largely undoing the merger, Zaslav is acknowledging something Wall Street has been saying for a while: WBD's assets are better off apart.

WBD shares were up as much as 13% in early trading. (However, Comcast's stock also popped when its spinoff was announced last fall, and has since fallen more than 20%.)

"The decision to separate Warner Bros. Discovery reflects our belief that each company can now go further and faster apart than they can together," Zaslav said on a call with investors about the spinoff.

When asked for comment, a WBD spokesperson referred Business Insider to comments made by executives on the investor call.

Better late than never

Many media analysts were initially excited when Zaslav orchestrated the deal to form WBD. But they soon soured on the media conglomerate as cord-cutting accelerated and WBD's streamer — Max/HBO Max — missed lofty expectations and failed to truly challenge the likes of Netflix.

Zaslav and company took note. WBD executives telegraphed this spinoff by reorganizing the business late last year, separating the TV networks from its studios and streaming businesses.

Wall Street was pleased by this potential split, which was the key catalyst for WBD's stock's 16% rally in the past month, UBS media analyst John Hodulik told BI last week.

Others agreed.

"Investor excitement for a Warner Bros. Discovery spin-off of its Global Linear Networks is building by the day," Lightshed analysts led by Rich Greenfield wrote last week.

Bank of America's Jessica Reif Ehrlich wrote in an early-June note that a "spin of studios and streaming could be the best way to unlock the significant unrecognized value of the company."

So far, it seems like she's right.

A sign of the times?

WBD's announcement will likely spark more speculation about future reordering of the media and entertainment landscape.

It's long been the expectation among industry insiders that WBD's spun-off linear networks would combine with others, potentially Versant, the linear assets that Comcast is spinning off. Other ideas that have been floated in media circles are a combination with Paramount — assuming its Skydance deal ever gets approved — or with Fox's linear assets.

Reordering is also afoot across the advertising industry. Two giant holding companies, Omnicom Group and Interpublic Group, are in the process of combining. Their peer WPP is replacing its CEO, Mark Read.

One wild card in the mix with WBD is CNN, with President Donald Trump's general hostility to deals involving media companies.

Longtime ad industry analyst Brian Wieser remarked that the news network could be an asset and a liability, given its history and future ability to attract the ire of Trump, who has been aggressive in targeting the mainstream media.

Wieser wrote on Monday that CNN would "probably benefit" from being separated from all of WBD's other assets as it's "the one part of WBD that could tie up other parts of this transaction so long as any government approvals are required to facilitate its completion."

Another question is the fate of WBD's studio business, which has been dragged down. On a call Monday announcing the separation, Zaslav emphasized that the movie business was harder to project than TV. But he said that by leaning into well-known IP, he saw WBD's studios arm becoming a $3 billion business.

The separation also could put WBD's studios business in play, Bernstein's Lauren Yoon said.

The companies that could ingest such a business include Amazon, Disney, Netflix, and Comcast. However, most of the tech companies haven't historically been big acquirers, and the timing isn't ideal.

"No tech companies want to give the government any reason to be in their business," said Jonathan Miller, chief executive of Integrated Media, which specializes in digital media investments.

Also, expect Bob Iger to field new questions about what's ahead for Disney's linear and cable networks. He once floated the idea of selling them, though he then retreated from the idea.

Disney's line at the time was that it wouldn't get the price it wanted if it sold those properties and that it'd be too complex to separate them from the rest of the company. Iger and Trump have also sparred in the past, and Disney could look to avoid deals that need government approval.

• Would you like to own CNN, TNT, and the Discovery Channel?
• Warner Bros. Discovery owns them now — but wants to get rid of them.
• WBD's move follows a similar one Comcast announced a few months ago. Because while cable TV networks still make money, they're a business in permanent decline.

No one wants to own cable networks anymore.

Would you like to buy some?

That is the pitch that Warner Bros. Discovery is making to Wall Street now that it has announced it's splitting itself into two companies: One will own Warners' movie and television studio and the HBO Max streaming service; the other — which it's calling its "global networks" unit — will own a bunch of cable TV networks including CNN, TNT, Discovery and the Food Network.

If that sounds familiar, it's for two reasons:

WBD has been contemplating this for a long time.

Last summer, it floated the same idea but didn't go forward with it. In December, it all but said it was going to do this, after all, by splitting itself up internally. Now it's doing it for real.

Comcast is doing the same thing.

Last October, Comcast said it would bundle almost all of its cable channels into a separate company (which it's calling Versant, for some reason) and hang onto its movie and TV studio and its Peacock streaming service.

Like Comcast, WBD insists that no, really, it's splitting off its cable TV networks so they can grow and thrive on their own, and you'd be lucky to buy a piece of them.

"The global networks business is a real business," WBD CEO David Zaslav said on the company's investor call Monday morning.

That is definitely true, since those cable networks continue to generate profits. It's also something you don't normally feel compelled to say when you're selling something people want to buy.

Because the big picture here is that both WBD and Comcast have concluded what investors — and people who watch things on TV — have concluded long ago: The cable TV business is a shrinking business, as more and more people cut the cord or simply never sign up for one. And the people who continue to watch cable TV are getting older and smaller in number.

The WBD split will generate all kinds of questions to ponder. Some of them are technical: How will WBD's $35 billion in debt be split up between the companies? How will the split companies approach future distribution deals with the likes of Comcast and Charter? How quickly could Comcast and WBD combine their two cable groups into one bigger cable group? Will the split help WBD's stock (it's up Monday — but note that Comcast also spiked when it announced its deal last fall, and has fallen some 20% since)?

Some questions the WBD split can generate may also matter to people who don't care about corporate finance. Such as: What does this mean for the future of CNN — the news channel that's struggling to find a lane in a loud and crowded media environment, but whose brand still has lots of potential value?

But the big takeaway is the obvious takeaway: The people who run the biggest collections of cable TV channels in the country would like someone else to own them. Because every quarter, the number of people who watch those channels and pay for those channels gets smaller.

Like I said late last year: These are garage sales. Maybe someone will want to own shrinking businesses that still throw off lots of cash (paging private equity). But the people who have them now think they'd be better off without them. Buyer beware.

IPOs are making headlines again, which could mean Pat Healy's hopes for "hot and heavy" activity this year may not be completely quashed after all.

Healy is the founder and CEO of Issuer Network, which helps C-suite executives leading IPOs get multimillion-dollar marketing packages from prospective stock exchanges through "bake-off" bidding competitions. For the last 30 years, he's worked behind the scenes on some of the biggest IPOs and corporate spin-offs, including Facebook, Zillow, KraftHeinz, and 3M.

He's won praise from clients such as Jason Child, the CFO of the semiconductor company Arm (and the former CFO of Splunk), and Dick Grasso, a former CEO of the New York Stock Exchange, who sat on opposite the deal table from Healy when he first started Issuer Network in 1995.

He's helped clients get everything from free advertising at Davos to NFL players attending their closing bell ceremonies.

Never heard of him? There's a reason for that. Healy, who appears to be a forefather of this type of bake-off, or contest between companies, runs his business largely by word of mouth. He also refuses to spend a dime on marketing. Just take a look at the company's website — the very picture of a mid-2000s web interface.

"I could make a big deal about some of these things, but that's not who I am," Healy, 74, told Business Insider in an interview. "I believe I do a really good job for people, and I shouldn't go around bragging about it. I just let my customers do the talking."

With IPOs back in the spotlight, thanks to the fintechs Chime and eToro, BI sat down with Healy and spoke to people who have worked with him. We wanted to understand the business and the man behind it, including how he got his start, how an exchange bake-off works, and what he's been occupied with since public offerings took a nosedive in 2022.

IPO activity has whipsawed this year with Trump's tariffs, and Healy saw several of the offerings in his docket pulled due to market volatility. Where things go next is anyone's guess, but Healy is bracing for a potential torrent of demand.

"Who knows when the sun's going to come out?" Healy said. "When it does, I expect all these guys to put their foot on the gas and come to market right away."

In the early '90s, after having held multiple CFO roles at DC-area banks, Healy started doing consulting work for Nasdaq. His job, he explained, was to disincentivize companies from leaving for the NYSE at a time when Nasdaq was a lesser-known exchange for new companies.

"I designed and helped build products that were useful to CFOs so that if they decided to leave Nasdaq, they'd have to give something up," he said. "They'd be less inclined to do so. And it created a stickiness."

That opened Healy's eyes to what he called an unfilled gap. Investment bankers advising on IPOs don't want to get caught in the crossfire between the exchanges, he said (and many banks are themselves listed in the NYSE). There are other professionals who help companies get listed on an exchange, including business consultants, but Healy's appears to have been the first to specialize in this competitive process for marketing perks.

"I discovered that CFOs really didn't have anybody to talk to when they had to make a decision about where they're going to list their stock," he said.

"There was no one else doing it. And there's still no one else doing it," he added.

Issuer Network's first client was AOL, the now (mostly) defunct internet and instant messaging service. Healy said he managed to get a meeting with the CFO and convinced him to let Healy negotiate a "co-branding package" on the company's behalf.

"I just hopped in my car and went over to Tyson's Corner," a Virginia suburb of Washington, DC, where AOL was headquartered at the time. "I visited with the CFO. I said, 'Look, you're on the wrong exchange here.'"

In August 1996, AOL switched from the Nasdaq to the NYSE.

AOL was an example of a service Healy refers to as "switches." Today, most of his business involves advising companies about to go public on which exchange they should be listed. Beyond the trading style and fit of a given exchange, there are hidden levers that companies ccan pull, said Healy.

"Issuers are always focused on the listing fee," he said. "What they don't see is what the exchange is going to make off the listing."

Exchanges cannot technically buy a company's listing, but they can pick up the tab for co-branded advertisements or other marketing perks. That's where Healy comes in. He essentially creates a competition between the exchanges to see which one can offer clients the best package with their listing.

"We create pretty substantial co-branding packages and we literally bake it off," he said.

Typically, a company would contact the exchanges to say it's decided to make its listing decision "a competitive process." Then, Healy said, the company would lay out how it wants to reach customers, and the exchanges would come back with "a co-branding package commensurate with those defined outcomes." From there, it's a back-and-forth of negotiations and adjustments until the company (not Healy, as he emphasized) names a winner. The whole process typically takes about six weeks.

Healy wouldn't reveal how much these deals are worth — except for one, which is public. The package he got for Arm, a semiconductor company that went public in 2023, was worth $50 million.

"He understands exactly what the terms and conditions are for the market," Child, Arm's CFO, said. "So he can help you understand, as the issuing company, what is the benefit to the exchange? What is the value they can provide? What are the pros and cons?"

Child first hired Healy when he was Groupon's CFO for the tech company's 2011 IPO. He tapped Healy again in 2023 when Arm went public.

Arm's package with Nasdaq, for example, included several years of advertising at the Davos World Economic Forum in Switzerland. As part of its deal, another Healy client, PNC, got NFL Hall of Famers, including Jerry Rice and Emmitt Smith, to ring the closing bell at the NYSE with company employees in 2010.

There are moments when both sides are unhappy, said Healy, but it's all business — nothing personal.

"I maintain very good relationships with both exchanges," he said. "We have no agenda here other than the best deal for our client. And we don't favor anybody. The minute we do, we lose all credibility and we're out of business."

Of the IPOs that happened during the early days of Healy's business, only a small percentage of his clients were large enough to be eligible for the NYSE. Those that were crossed Grasso's desk, the former NYSE chief told BI.

"Some of my marketing people, in the early days of Pat's business, were highly skeptical," said Grasso, who headed the exchange from 1995 to 2003. "But after a couple of sit-downs with me, I was very comfortable that Pat was going to be fair."

Healy also advises clients on what he refers to as "spins," when a company spins off a part of its business into its own company. Issuer Network has worked on more of these during the recent IPO downturn.

"You've got Comcast spinning, Honeywell spinning, FedEx spinning. You've got quite a lineup of spins out there," he said. "We've done a lot of spins in our day, and we expect to be active in the spin market here for the foreseeable future — through the summer, at least. A lot of these deals will bleed into '26, but their exchange selection decision I expect will be made in '25."

Healy said he couldn't disclose current clients, but noted he worked on a spin with 3M last year. He advised the company as it spun off its healthcare business, now called Solventum, and led a bake-off between exchanges for both the parent and spin company at the same time.

"The winner takes all," Healy said. "So instead of getting a $5 or $10 million co-branding package for 'Spinco,' you get many times that amount for the whole enchilada."

(3M stayed with the NYSE, and Solventum joined its listings.)

Healy declined to discuss his fees, but said he follows a "satisfaction guarantee" policy: He tells clients they can "tear up our invoice" if they aren't happy — something of an anomaly on Wall Street.

Child called Healy "an old soul."

"He basically just tells you, 'Pay me what you think it's worth' when it's over," Child said. "It's like the opposite of dealing with an enterprise software person."

Healy's humble upbringing might explain his aversion to the spotlight. Growing up, he was one of nine children. His father was a mailman in the Cleveland suburb of Brook Park. The town was home to a Ford manufacturing plant, what Healy described as "an ugly scene" — not necessarily the kind of place you might expect someone who brokers deals on Wall Street for some of the largest corporations in the world to get their start.

"I'm just a hick from Ohio," Healy said. "People like talking to me. And I have something good to offer them. You build a momentum over time by just keeping your nose to the grindstone, delivering good results, and just shooting straight with people."