The creation of a new company combing the media assets of AT&T’s Warner Media and Discovery Inc will create a “fully scaled and differentiated global streaming platform”, according to Discovery’s David Zaslav.
The Discovery CEO will take control of the new venture in which Discovery shareholders will own 29%. Zaslav will have an office on the Warner Bros lot.
In an online press briefing AT&T CEO John Stankey said he had been comntemplating the future of the business for some time.
AT&T will receive £43 billion from its new partners to compete the move that could be interpreted as another telco deciding it was in the pipe business rather than showbusiness, another US mega-merger, or more likely an acknowledgement that scale works in the growing direct-to-consumer sector.
For Zaslav, the key is IP, pointing to the way that WarnerMedia’s HBO had previously sold on the rights to some of its key shows, and suggesting partners including Sky may have trouble renewing their output deals as renewal comes around in the future.
At this early stage there was little clarity as to how the merger might impact on the bundling of the respective platforms Discovery+ and HBO Max: “We’re going to do it differently,” said Zaslav with a nod to HBO’s new AVOD tier.
There was also concern as to the future of CNN and whether it might be spun off. Zaslav, who launched CNBC, was supportive: “We love CNN. If you go to Europe we’re entertainent, non-fiction, the leader in sports and we’ve been on attack with news. We’ve just made a very big investment in the UK [in GB News], in terms of direction for us, and our plan was to roll across Europe, because we believe one of the differentiators is live, news, live sports.”
The transaction to close mid 2022, but a name for the venture is expected to be announced in the next few days.
