Competitive DisadvantageWBD's competitors are large, and by splitting in half, both pieces will be even more sub-scale, which may become a growing threat to their survival.
Credit Rating DowngradeS&P downgraded WBD's credit rating to BB+ citing continued revenue and cash flow declines, and post-split, fewer assets in each company could result in further downgrades.
Management DistractionThe split will likely distract senior management for 9–12 months to focus on financial engineering, which is not a long-term value creation tool.