AT&T’s WarnerMedia and Discovery are combining to create one of the world’s biggest content streaming platforms, challenging the market dominance of Netflix and Amazon.
The new company, including HBO Max and the recently launched discovery+, will combine WarnerMedia’s library of valuable content with Discovery’s global footprint
And the platform will be able to invest in more original content for its streaming services. The two currently spend more than $US20 billion a year combined.
The pure play content company will own one of the deepest libraries in the world with nearly 200,000 hours of programming and will bring together more than 100 brands including HBO, Warner Bros., Discovery, DC Comics, CNN, Cartoon Network, HGTV, Food Network, the Turner Networks, TNT, TBS, Eurosport, Magnolia, TLC and Animal Planet.
The company will have significant scale and investment resources with projected 2023 revenue of $US52 billion.
Under the deal, AT&T will receive $43 billion in a combination of cash, debt securities and WarnerMedia's retention of certain debt. AT&T shareholders will end up with a 71% in the new platform. Discovery shareholders will have 29%.
AT&T CEO John Stankey says the 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,” he says.
Discovery CEO David Zaslav, who will lead the new company: "During my many conversations with John, we always come back to the same simple and powerful strategic principle: these assets are better and more valuable together.”
Zaslav says it is exciting to combine such historic brands, world class journalism and iconic franchises under one roof and unlock so much value and opportunity.
“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,” he says.
“That will be our singular mission: to focus on telling the most amazing stories and have a ton of fun doing it.”
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