In an unexpected development, AT&T has opted to sell WarnerMedia‘s entertainment assets over to Discovery Inc.
According to The New York Times, WarnerMedia companies like Warner Bros. and HBO (among many others) will be merging with Discovery Inc. The Chief Executive Officer of Discovery, David Zaslav, will be the leader of this newly-created company. The deal is expected to be complete by 2022 and the individual media companies expect to eventually save $3 billion annually.
The new merger between Discovery/WarnerMedia will create a company that dwarfs both Netflix and NBCUniversal in size. The focus of this new entity will be the individual streaming services of WarnerMedia and Discovery, HBO MAX and Discovery+ respectively, as well as both company’s large profiles of cable channels. Discovery Inc. is also the home of channels like the Food Network, TLC and the Oprah Winfrey Network.
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Several questions still hover over this planned merger, primarily the status of high-profile WarnerMedia figures. It is unclear, for example, what role Jason Kilar, the current Chief Executive Officer of WarnerMedia, will have after the Discovery/WarnerMedia merger closes.
In June 2018, AT&T closed its acquisition of Time Warner for a whopping $85 billion, after which it renamed the company WarnerMedia. In the three years since it owned the various WarnerMedia companies, AT&T faced many challenges, including those brought on by the coronavirus (COVID-19) pandemic, as well as doubt from some stockholders over the viability of a telecommunications company like AT&T engaging in the entertainment industry.
Source: The New York Times
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