AT&T is officially spinning off WarnerMedia, which will merge with Discovery to form a new media-focused company capable of competing with The Walt Disney Company, NBCUniversal, and Netflix. The merger, officially announced following rumors circulating on Sunday, will give CNN, TBS, TNT, HGTV, Food Network, Discovery Channel, Warner Bros. Pictures, Discovery+, and HBO Max a single corporate parent. The merger also raises questions about DC Comics' future. The publisher is a part of the WarnerMedia family of brands. The new company formed from this merger will become DC's new parent.
AT&T announced the merger in a statement released morning. Discovery CEO David Zaslav will become the head of the new company.
"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," John Stankey said in a statement. "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. For AT&T shareholders, this is an opportunity to unlock value and be one of the best capitalized broadband companies, focused on investing in 5G and fiber to meet substantial, long-term demand for connectivity. AT&T shareholders will retain their stake in our leading communications company that comes with an attractive dividend. Plus, they will get a stake in the new company, a global media leader that can build one of the top streaming platforms in the world."
"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 added. "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. 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. That will be our singular mission: to focus on telling the most amazing stories and have a ton of fun doing it."
The merger comes after the high-profile launches of WarnerMedia's HBO Max and Discovery's Discovery+ streaming services. It also follows a series of corporate restructurings at WarnerMedia that have led to layoffs. The new company will be the second-largest media entity in Hollywood, behind only Disney in terms of size.
This week is May Upfronts Week when networks present their programming slate for advertisers. Discovery presents on Tuesday. WarnerMedia presents on Wednesday.