On April 5, Variety reported that the Discovery-WarnerMedia deal could be completed as early as Friday, April 8. It was initially expected to be closed on April 11. The new company will be known as Warner Bros. Discovery.
WarnerMedia And Discovery
After the deal is through, AT&T shareholders will have control over 71% of Warner Bros. Discovery. The merger will also bring their streaming services, HBO Max and Discovery+ under one roof.
In March, Discovery CFO Gunnar Wiedenfels mentioned that after the merger, the company would offer both streaming services together until they figure out a way to consolidate the services.
Apart from HBO Max, WarnerMedia also owns a host of channels, including HBO, CNN, CNN+, Warner Bros., DC Films, New Line Cinema, TBS, TNT, TruTV, Cartoon Network/Adult Swim, Turner Sports, and Rooster Teeth. On the other hand, Discovery has under its umbrella Discovery+, Discovery Channel, Investigation Discovery, Travel Channel, Turbo/Velocity, HGTV, Food Network, TLC, Animal Planet, Science Channel and OWN (Oprah Winfrey Network).
WarnerMedia and Discovery have joined hands to build a premium entertainment conglomerate.
AT&T will combine its WarnerMedia division with Discovery and give the company $43 billion in a combination of cash, debt securities and WarnerMedia’s retention of certain debt. While AT&T shareholders will receive stock worth 71% of the new company, Discovery shareholders will receive 21%.
The new company is set to invest more in developing original content for its streaming services, enhancing program options for its linear pay TV and broadcast channels. The deal has been cleared by the US Department of Justice and will merge the two media giants in a $43 billion transaction.
An Expected Ending and a New Beginning
The mega-deal is not without trouble. On April 5, WarnerMedia CEO Jason Kilar announced that he will be stepping down ahead of the acquisition. He took the mantle at Warner in May 2020, after then-CEO John Stankey’s exit.
According to sources, Kilar announced his resignation in a memo before the completion of the deal. Kilar is credited with reshaping the company during the two years he was at the top. He mentioned he would’ve liked to have more time in a conversation to the Los Angeles Times. He stated, “I wish that we had more runway because we are working on so many things right now — digital collectibles and [nonfungible tokens], our streaming expansion throughout the globe, and our work in gaming, which has been a huge focus of mine for the past two years.”
Kilar helped reshape HBO Max, especially during the pandemic, eventually leading it to become one of the most popular streaming services. He acknowledged the growth of the company saying, “We’ve been in the middle of a pandemic, cord-cutting has continued at 5% to 7% a year, and theaters have been closed, or partially closed. And we literally just delivered the highest revenues in the 99-year history of the company.”
Discovery President and CEO David Zaslav is set to take up the mantle of the combined company. Zaslav had signed a new employment contract in 2021 which is scheduled to end in 2027. As per a regulatory filing, Zaslav’s compensation package will also see a boost as it will rise to $246 million from the $37.7 million he earned in 2020. He will lead the company with help from executives of both firms in key leadership roles. The merger was first announced in May 2021.
Christy Gren
Christy Gren is an Industry Specialist Reporter at Industry Leaders Magazine she enjoys writing about Unicorns, Silicon Valley, Startups, Business Leaders and Innovators. Her articles provide an insight about the Power Players in the field of Technology, Auto, Manufacturing, and F&B.
