Simon Gwynn
May 18, 2021

WarnerMedia and Discovery join to form world’s second biggest media company

AT&T, the current owner of WarnerMedia, will be the majority shareholder.

HBO: shows include Mare of Easttown, starring Kate Winslet and Guy Pearce (Photo: Sarah Shatz/HBO)
HBO: shows include Mare of Easttown, starring Kate Winslet and Guy Pearce (Photo: Sarah Shatz/HBO)

AT&T will spin off the WarnerMedia business it acquired three years ago and combine it with rival Discovery to form the world’s second biggest media company after Disney.

Under the deal, AT&T will receive $43 billion in a combination of cash, debt securities and WarnerMedia’s retention of certain debt, with AT&T’s shareholders taking a 71% stake in the new company. Discovery’s shareholders would get the remaining 29%. 

David Zaslav, president and chief executive of Discovery, will lead the company, which will have an enterprise value of about $132 billion, according to the Financial Times

WarnerMedia owns the Warner Bros film and TV studios along with HBO and CNN, while Discovery owns 20 US TV channels and international properties, including Eurosport and the UK’s Good Food, Home and Really channels, which were previously part of UKTV.

Both companies have made significant steps into streaming in recent years via platforms such as HBO Max and Discovery+. John Stankey, chief executive of AT&T, said the new operation would be “a global media leader that can build one of the top streaming platforms in the world”. The fiercely competitive sector is dominated globally by Netflix, Disney and Amazon.

“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,” Stankey added.

“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.”

Zaslav said: “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.”

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