| 17 May 2021
Even in a market where mega mergers have been the norm over the last few years, the broadcast industry is reportedly set for a shock with the news that comms giant AT&T is in advanced discussions to merge its relatively recently acquired WarnerMedia content division with Discovery Inc.
Reports for the US are suggesting that the board of AT&T met on 16 May to approve the deal which could likely be sealed within the next few days. The move may likely result in a content giant worth $150 billion and would disrupt severely not just the market as a whole but in particular the direct-to-consumer subscription video-on-demand (SVOD) arena in which the two firms have growing and competitive services in the form of discovery+ and HBO Max.
By Charles Riley, CNN Business
In the all-stock deal, AT&T will receive $43 billion in a combination of cash, debt securities, and WarnerMediaâs retention of certain debt. AT&T shareholders will receive stock representing 71% of the new company and Discovery stockholders will own 29% of the new company.
AT&T had pushed into the streaming sector through HBO Max, a direct competitor with Netflix, Apple, Disney and Comcast. Discovery launched a standalone streaming service called discovery+ this year.
The new company will be able to invest more in original streaming content. It will house almost 200,000 hours of programming and bring together more than 100 brands under one global portfolio, including: DC Comics, Cartoon Network, Eurosport, Magnolia, TLC and Animal Planet.
Shock AT&T-Discovery Deal Raises Questions for Global Streaming Expansion
Manori Ravindran, provided by
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If AT&T and Discovery’s shock announcement underlines any learnings in recent years, it’s that legacy media is fighting back. And for this particular deal, a key battleground could be overseas.
The new combination of WarnerMedia and Discovery, a closely guarded manoeuvre relegated to C-suite executives, has come as a surprise to the vast majority of staff in both companies’ international camps, who hope a town hall quickly scheduled for Tuesday will clear up confusion around what’s to come one of the most urgent matters, by most accounts, being what lies ahead for each company’s much-ballyhooed streaming offering.
| 17 May 2021
Confirming earlier reports of a deal that is being described as monumental and likely to lead to a reshaping of the media landscape, AT&T has entered into a definitive agreement to combine its WarnerMedia premium entertainment, sports and news assets with Discovery s entertainment and sports businesses.
Under the terms of the agreement to create a premier, standalone global entertainment company, AT&T is scheduled to receive $43 billion in a combination of cash, debt securities, and WarnerMedia’s retention of certain debt with its AT&T’s shareholders receiving stock representing 71% of the new company and Discovery shareholders 29%. AT&T and Discovery say that the new company will have significant scale and investment resources with projected 2023 revenue of approximately $52 billion, adjusted EBITDA of approximately $14 billion and a free cash flow conversion rate of approximately 60%.