After a few days of rumors, AT&T and Discovery Inc. have made it official: both companies will merge, making a couple of streaming platforms, HBO Max and the newborn Discovery + are under the same umbrellaas well as a good number of traditional channels, such as CNN, TNT, Food Network, Animal Planet, TLC, Oprah Winfrey’s OWN and the Discovery Channel, among others. The result is described, according to those involved, as a “global leader in entertainment”
They affirm after the confirmation of the merger that the resulting company, that “the transaction combine WarnerMedia’s historic and highly popular content library with Discovery’s global presence, its wealth of content in local languages and its deep experience in more than 200 countries and territories. “For practical purposes, the merger will translate into the ability to” invest in more original content for its streaming services and improve programming options on its global linear pay TV channels. “
Merger of charges
The organization chart of directors of the two companies will also be logically affected: Discovery CEO David Zaslav becomes CEO of the merged company. It is not clear what will happen to Jason Kilar, CEO of WarnerMedia and who lately was in charge of making public the company’s plans related to HBO Max globally. For practical purposes, this movement provides diversity to the T&T offer: Discovery’s 20 channels account for 25% of the pay television audience in the United States, and most of its contents are contests and reality shows, which is where it limps WarnerMedia.
Regarding business expectations, $ 52 billion in profits are expected by 2023, after investing $ 3 billion in costs related to synergy. This is a very attractive moment for both companies, since the HBO Max platform, which is conditioning all Warner Media production and distribution movements with its future plans, is about to be launched internationally.
It is obvious that mergers of large entertainment and content production companies are becoming an indisputable trend in the industry: the most media coverage due to its juicy content is the purchase of Fox by Disney, but it is not the only one. In 209, Viacom and CBS merged, taking advantage of their catalog to launch Paramount +. And now a decade ago, Comcast acquired most of NBCUniversal, which eventually led to its takeover: Warner and Universal were for years the subject of rumors about a merger that has finally occurred between AT&T and Discovery. But given the disappointing results from NBCUniversal’s streaming platform Peacock, this may not be the last move we see an AT&T eager to go head-to-head with the almighty Netflix and Disney +.