AT&T to spin off WarnerMedia and combine it with Discovery in a $43B deal; the new company will be run by Discovery CEO David Zaslav
Felix Salmon asked a question on Twitter: Wall Street Journal : AT&T's Hollywood Ending Erased Billions in Value Sara Fischer / Axios : Scoop: Discovery CEO David Zaslav signs new contract through 2027 Brendan Sinclair / GamesIndustry.biz : WarnerMedia to join with Discovery in $43bn deal Karl Bode / Techdirt : After 50,000 Layoffs And Absolute Chaos, AT&T Ends Its Bungled Media Experiment Scott Porch / Decider : Why AT&T and Discovery Think Bigger is Better for Streaming NBC News : Long live the bundle: How AT&T's big deal harkens a return to TV's old days Andrew Wallenstein / Variety : OMG, They Killed Kilar! AT&T Backstabs Its Own Hatchet Man Kes Eylers-Stephenson / TrueAchievements : WB Games set to split after Discovery merger Seth Barton / MCV/DEVELOP : WarnerMedia to join Discovery - but fate of games businesses remains uncertain Conor Allison / Pocket-lint : Warner Bros Interactive Entertainment studios set to split as part of the AT&T-Discovery deal Steve Muchoki / Coinspeaker : T and DISCA Stock Down, AT&T Agrees to Merge Its WarnerMedia Unit with Discovery in $43B Deal Bloomberg : Boutiques Allen, LionTree Leap in M&A Rankings on AT&T Megadeal Tweets: Alex Sherman / @sherman4949 : David Zaslav officially will run the combined company. AT&T will nominate 7 members of the board including a chairperson TBD. Discovery will nominate 6, one of which will be Zaslav. Richard Blumenthal / @senblumenthal : This mega-merger combining two of the country's largest media conglomerates demands close scrutiny to protect consumers' pocket books instead of accelerating further concentration among corporate behemoths. https://www.cnn.com/... Matthew Belloni / @mattbelloni : Warner Bros had to pay $200M+ extra to appease talent irate over the decision to put movies on HBO Max same day as theaters, @JBFlint reports. https://www.wsj.com/... See also Mediagazer
CNNBrian Stelter
Context & Ripple Effects
AT&T had only recently completed its $85.4B acquisition of Time Warner, after announcing the transaction in 2016. The spin-off reverses that ownership structure while pairing WarnerMedia with Discovery under David Zaslav and a board split between the two companies.
AT&T gives up direct control of WarnerMedia, while Discovery CEO David Zaslav takes charge of the combined company and Discovery gains six of its 13 board nominations.
Warner Bros. Interactive Entertainment's game studios are drawn into the transaction's separation process, putting their organizational home under review alongside WarnerMedia's other businesses.
Second-order effects
HBO Max and Discovery+ face pressure to move from separate services toward a bundle and eventual single offering, changing how the combined company packages its entertainment catalog.
AT&T's media strategy shifts from owning the operation to holding a stake in the new company, concentrating day-to-day programming, distribution, and product decisions under Zaslav's team.
Third-order effects
The deal points to streaming competition being organized around broader content portfolios and combined subscription products, rather than standalone services tied to a single legacy media owner.
The trend: Legacy media groups are reassembling film, television, and streaming assets into larger subscription platforms while telecom owners retreat from direct entertainment control.
David Zaslav officially will run the combined company. AT&T will nominate 7 members of the board including a chairperson TBD. Discovery will nominate 6, one of which will be Zaslav.
This mega-merger combining two of the country's largest media conglomerates demands close scrutiny to protect consumers' pocket books instead of accelerating further concentration among corporate behemoths. https://www.cnn.com/...
Warner Bros had to pay $200M+ extra to appease talent irate over the decision to put movies on HBO Max same day as theaters, @JBFlint reports. https://www.wsj.com/...
Hard to rebut the argument that this whole useless, job-destroying series of mergers and spin-offs was done solely to get Time Warner's former CEO a $400 million golden parachute https://www.cnbc.com/...
Announced today, @ATT @WarnerMedia and @Discovery are coming together to create a premier, standalone global entertainment company. Learn more and other important information: https://go.att.com/... https://twitter.com/...
“Jason Kilar has hired a legal team to negotiate his departure as chief executive of WarnerMedia,” @brooksbarnesNYT reports, citing “two people briefed on the matter.” He says “Kilar was kept in the dark about the deal until recent days...” https://www.nytimes.com/...
Big takeaways: —Major course correction by AT&T, fully leaving content —Zaslav ascends to big new role —Doesn't look very promising for Jason Kilar —Company will be live sports, news, movies, lifestyle —$20B combined content spend —Rushed announcement https://www.axios.com/...
The interesting part of this is less the merger part and more that as part of this deal, AT&T would be breaking itself up and spinning off all of its media properties into a new company. That seems like an admission that its strategy of combining telecom + media didn't work. http…
If AT&T spent $85 billion buying Bitcoin instead of buying TimeWarner, it would be sitting on $5.7 trillion in Bitcoin right now. Really makes you think.
Similarly, if it had plowed it into Doge, it would be sitting on $190 trillion. Execs have to be kicking themselves when they see tweets like this pointing out what was clearly the better financial decision.
Another major plot point to this story will be the follow-on copycat deals. NBCU ViacomCBS AMC Lionsgate MGM Sony Media bankers going to be busy tomorrow. https://www.cnbc.com/...
Yeah, look at all these “juggernauts:” 1989: Time Inc and Warner Comm. merge. 1996: Time Warner acquires Turner/CNN. 2000: TW buys AOL. 2009: TW spins off AOL. 2014: TW spins off Time Inc. 2015: Verizon buys AOL. 2018: AT&T buys Time Warner. https://twitter.com/...
AT&T spent $200 billion on DirecTV and Time Warner thinking it would dominate the media landscape. Instead it lost 8.5 million TV subscribers since 2017, fired a parade of people, pissed off thousands more, gutted numerous brands, then stumbled to the exit. CNN: ¯\_(ツ)_/¯
AT&T owned CNN's coverage of the Discovery move doesn't mention the 50k layoffs, the absolute chaos, the butchering of loved brands (Mad Magazine, DC's Vertigo imprint), nothing. Not a single mention of AT&T hubris or mistakes. Amazing: https://www.cnn.com/...