With the merger of WarnerMedia and Discovery, AT&T is jettisoning another media property to form a new, standalone video-streaming competitor with a huge amount of content.
The deal, announced this morning, creates a new media entity with control of the Warner Bros. movie studio, as well as Adult Swim, Animal Planet, Food Network, Cinemax, CNN, Cartoon Network, DC, Discovery, HBO, and more.
Details about what this means for HBO Max and discovery+ subscribers are scant, but it appears that the deal will combine the two services, bringing together HBO's prestige TV with the guilty-pleasure fare found on discovery+. With so many high-profile channels and movie franchises under its control, the new company will be well-placed to take on the major streaming platforms including Disney+, Netflix, and Amazon Prime Video.
"This agreement...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," says AT&T CEO John Stankey.
AT&T acquired WarnerMedia in 2016 for $85 billion. Under the deal announced today, AT&T will spin off WarnerMedia into its own thing and merge it with Discovery, which only just jumped into the streaming space earlier this year with discovery+.
In February, AT&T also spun off DirecTV, which it acquired in 2014 for $48.5 billion, into a new business that will handle DirecTV, AT&T TV, and the U-verse video services.
The WarnerMedia-Discovery deal still needs to be approved by regulators, but AT&T is eyeing a mid-2022 close.