AT&T In ‘Advanced’ Talks To Combine HBO, CNN, Discovery And Other Media Assets
AT&T is currently in ‘advanced’ discussions to combine several media assets into a giant portfolio, which would include beleaguered CNN and Discovery, according to the Wall Street Journal, citing people familiar with the matter. The move would mark a major shift in strategy for the telecom giant.
Also included would be several components of the company’s WarnerMedia division, including the TBS, TNT and HGTV cable channels, and other names in their media portfolio such as HBO, and would constitute one of Hollywood’s most valuable catalogues.
As noted, the deal is said to be in ‘advanced’ talks, with an agreement potentially coming as soon as Monday, according to the report. Others have cautioned that this isn’t a done deal, and talks could still fall apart. Should it proceed, AT&T shareholders would own a large stake in the new entity.
A deal between WarnerMedia and Discovery, whose portfolio includes its namesake network and HGTV, would further consolidate a media business buffeted by cord-cutting and competition from streaming video.
The talks signal a major pullback by AT&T, which placed a massive bet on media with its 2018 acquisition of Time Warner Inc. for around $81 billion. That deal made it the world’s most indebted nonfinancial company. -WSJ
The negotiations were first noted by Bloomberg, which reported that AT&T was looking to combine media assets with Discovery.
As the Financial Times reports, AT&T’s board of directors met Sunday to approve the deal, which is expected to be announced in the coming days.
The combination would merge one of Hollywood’s most valuable catalogues — spanning the Warner Bros film and television studios, the HBO network and a portfolio of cable channels including CNN — with Discovery, which has had success with a new streaming service aimed at unscripted cooking and home renovation shows.
After years of watching Netflix dominate the streaming landscape, the world’s largest media and tech companies have sought to fight back with their own services. In the past year and a half, Disney, Apple, WarnerMedia, Comcast, Discovery and others have launched streaming platforms as they battle for a piece of the future of entertainment.
The structure of the deal remains unclear but AT&T, which has a market value of about $230bn, is expected to control most of the combined entity. Discovery has a market value of $24bn.
The deal comes five years after AT&T agreed to buy TimeWarner for $85.4 billion in a bid to become the world’s largest vertically integrated content and distribution company.
Two years ago, AT&T CEO John Stankey and Discovery head David Zaslav discussed combining their programming into an $8/month streaming service which would exclude HBO, however Disney’s announcement that it would drop its Star Wars, Pixar, Marvel and Disney Classics catalogue into a $7/month streaming service caused Stankey and Zaslav to scrap the plan. Instead, Stankey created HBO Max, combining HBO with the rest of WarnerMedia’s programming.
Sun, 05/16/2021 – 13:32
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