AT&T has confirmed it’s to spin-off its media business which will then be merged with Discovery, Inc. Confirmation of the deal comes after early reports over the weekend.
The deal brings together Discovery’s factual and lifestyle channels, Eurosport and its Discovery+ streaming service, with AT&T’s media assets, including Warner Bros., HBO, CNN, DC Comics, the Turner Networks and HBO Max.
The companies say the merger will enable increased investment in original content and allow the new business to better compete with global streamers.
Under the terms of the deal announced today, AT&T’s shareholders will own 71% of the new company with Discovery shareholders holding the balance. Discovery President and CEO David Zaslav will lead the business which will have a 13-strong Board of Directors with 7 initially appointed by AT&T, including the chairperson.
AT&T CEO John Stankey said: “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.”
David 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. “
The deal is expected to close in mid-2022.