AT&T, Discovery to launch global streaming media giant
AT&T, the owner of HBO and Warner Bros studios, and cable and streaming network Discovery, the owner of lifestyle TV networks such as HGTV and TLC, will combine their media assets to create a standalone global streaming business, the US telecommunications giant said on Monday.
The proposed deal would put together one of Hollywood’s most powerful studios, home to the Harry Potter and Batman franchises, with Discovery’s stable of unscripted home, cooking and nature and science shows.
The deal also marks the unwinding of AT&T’s US$108.7-billion acquisition of US media conglomerate Time Warner in 2018, and underscores its recognition that TV viewership has moved to streaming, where scale is required to take on the likes of Netflix and Walt Disney.
Under the terms, AT&T would receive $43-billion in a combination of cash, debt securities and Warner Media’s retention of certain debt
Discovery president and CEO David Zaslav will lead the new company.
Under the terms, AT&T would receive $43-billion in a combination of cash, debt securities and WarnerMedia’s retention of certain debt. AT&T’s shareholders would receive stock representing 71% of the new company, while Discovery shareholders would own 29% of the new company.
With the acquisition of Time Warner, AT&T sought to create a media and telecoms powerhouse, combining content and distribution.
Yet this proved a costly strategy as it simultaneously sought to expand next-generation wireless services, most recently borrowing $14-billion to buy more wireless spectrum.
The new company is projected to have 2023 revenue of about $52-billion and adjusted Ebitda, or earnings before interest, tax, depreciation and amortisation, of about $14-billion as well as $3-billion in expected annual cost synergies.
The deal is anticipated to close in mid-2022, pending approval by Discovery shareholders and regulatory approvals. — Reported by Kenneth Li and Subrat Patnaik, (c) 2021 Reuters TIME WARNER TOP WARNER BROS