AT&T has entered into a definitive agreement to combine its WarnerMedia entertainment, sports and news assets with Discovery’s entertainment and sports businesses.
This merger will create a new company which will own nearly 200,000 hours of programming from over 100 leading brands, including HBO, Warner Bros., Discovery, DC Comics, CNN, Cartoon Network, HGTV, Food Network, the Turner Networks, TNT, TBS, Eurosport, Magnolia, TLC, Animal Planet and ID.
AT&T and Discovery say the new company will be able to invest in more original content for its streaming services, enhance the programming options across its global linear pay-TV and broadcast channels, and offer more video experiences and consumer choices.
The increased investment and capabilities in original content and programming could mean more opportunity for under-represented storytellers and independent creators, as well as the ability to serve customers with improved video experiences and points of engagement.
Current Discovery President and CEO David Zaslav will lead the proposed new company with a management team and operational and creative leadership drawn from both companies.
AT&T will receive US$43 billion in a combination of cash, debt securities, and WarnerMedia’s retention of certain debt with AT&T’s shareholders receiving stock representing 71% of the new company and Discovery shareholders 29%. The new company will have a projected 2023 revenue of approximately US$52 billion. AT&T shareholders are expected to get a stake in the new company.