DALLAS and NEW YORK — AT&T and Discovery announced today a US$43-billion agreement to combine the entertainment and media assets of WarnerMedia and Discovery, including their streaming services HBO Max and discovery+.
WarnerMedia’s entertainment and news brands include HBO, HBO Max, Warner Bros., TNT, TBS, truTV, CNN, DC Entertainment, New Line, Cartoon Network, Adult Swim and Turner Classic Movies. Discovery’s portfolio of brands includes Discovery Channel, HGTV, Food Network, TLC, Investigation Discovery, Travel Channel, MotorTrend, Animal Planet, Science Channel, plus the streaming services discovery+, Food Network Kitchen and MotorTrend OnDemand. Discovery’s other media assets include Magnolia Network, OWN: Oprah Winfrey Network in the U.S., Discovery Kids in Latin America, and Eurosport. Discovery’s networks and platforms are available in more than 220 countries and territories and almost 50 languages.
Under the terms of the all-stock transaction, AT&T will receive US$43 billion in a combination of cash, debt securities and WarnerMedia’s retention of certain debt, and AT&T’s shareholders will receive stock representing 71% of the new company. Discovery shareholders will own 29% of the new company. Both companies’ boards have approved the transaction.
(AT&T paid US$85 billion to acquire Time Warner in 2018.)
Current Discovery president and CEO David Zaslav will lead the proposed new company, which will have a 13-member board of directors, with seven members appointed initially by AT&T and six appointed by Discovery.
The merger transaction is expected to close in mid-2022, subject to approval by Discovery shareholders and U.S. regulatory approvals.
It’s not known at this point how this will affect Bell Media and Corus Entertainment, each of whom rely mightily on, and pay heavily for, the rights to brands and content of the newly merged company through long-term contracts.
“This agreement unites two entertainment leaders with complementary content strengths and positions the new company to be one of the leading global direct-to-consumer streaming platforms. It will support the fantastic growth and international launch of HBO Max with Discovery’s global footprint and create efficiencies which can be re-invested in producing more great content to give consumers what they want,” said AT&T CEO John Stankey, in a press release.
“During my many conversations with John, we always come back to the same simple and powerful strategic principle: These assets are better and more valuable together,” added Zaslav.
“With a library of cherished IP, dynamite management teams and global expertise in every market in the world, we believe everyone wins… consumers with more diverse choices, talent and storytellers with more resources and compelling pathways to larger audiences, and shareholders with a globally scaled growth company committed to a strong balance sheet that is better positioned to compete with the world’s largest streamers.”
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