AT&T and Discovery Inc. have officially announced this Monday, May 17th a definitive agreement between Discovery and WarnerMedia to create a new standalone global entertainment company, which will be led by David Zaskav, Discovery’s President & CEO. The Board of Director of both AT&T and Discovery have approved the transaction, which is anticipated to close in mid-2022.
Under the terms of the agreement, AT&T would receive USD 43 billion in a combination of cash, debt securities, and WarnerMedia’s retention of certain debt, and AT&T’s shareholders would receive stock representing 71% of the new company. Meanwhile, Discovery shareholders would own 29% of the new business. The agreement combines ‘WarnerMedia’s premium entertainment, sports and news assets with Discovery’s leading nonfiction and international entertainment and sports businesses to create a premier, standalone global entertainment company’, they reported both from AT&T and Discovery in an official statement. Both companies have also informed that the new company’s Board of Directors will consist of 13 members; seven officially appointed by AT&T, and six appointed by Discovery, including CEO David Zaslav.
In terms of content, the new company will feature nearly 200 thousand hours of programming and will bring together some of the most popular brands in the world under one global portfolio, including HBO, Warner Bros., Discovery, DC Comics, CNN, Cartoon Network, HGTV, Food Network, the Turner Networks, TNT, TBS, Eurosport, Magnolia, TLC, Animal Planet, ID and more. Recently, both companies had fixed their OTT strategies with the launches of HBO Max, which will be launched in Latin America in June, and Discovery+, with launch plans in the region.
‘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’, reported John Stankey, AT&T’s CEO.
Zaslav has also expressed himself on the WarnerMedia-Discovery merger: ‘During my many conversations with John (Stankey), we always come back to the same simple and powerful strategic principle: these assets are better and more valuable together. It is super exciting to combine such historic brands, world class journalism and iconic franchises under one roof and unlock so much value and opportunity. 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. We will build a new chapter together with the creative and talented WarnerMedia team and these incredible assets built on a nearly 100-year legacy of the most wonderful storytelling in the world. That will be our singular mission: to focus on telling the most amazing stories and have a ton of fun doing it’, he said.