(CelebrityAccess) — Telecom and digital content giant AT&T announced plans to merge its entertainment, sports and news assets with Discovery, Inc. to create a new, standalone company in a deal valued at $43 billion.
The deal, which includes AT&T’s brands CNN, HBO, TNT and TBS along Discovery’s Food Network, HGTV and others comes amid the rapid shift of content delivery to on-demand streaming.
The “pure play” content company created by the deal will include more than 200,000 hours programming and will bring more than 100 brands under one global portfolio, including: HBO, Warner Bros., Discovery, DC Comics, CNN, Cartoon Network, HGTV, Food Network, the Turner Networks, TNT, TBS, Eurosport, Magnolia, TLC, Animal Planet, ID and many more.
The deal also seems to indicate that AT&T, who for several years has been trying to establish itself in the streaming and entertainment sector, is re-orienting its strategy. Both AT&T and Discover operate on-demand streaming platforms, HBO Max and Discover+.
According to AT&T, the deal will combine WarnerMedia’s extensive content library with Discovery’s global footprint, including local-language content and regional expertise with a footprint that extends across more than 200 countries and territories.
The deal will also mean greater investment in original content for its streaming services, as well as enhanced programming across its global linear pay TV and broadcast channels, the companies said.
Following the merger, Discovery President and CEO David Zaslav will lead the proposed new company with a best-in-class management team and top operational and creative leadership from both companies.
“This agreement unites two entertainment leaders with complementary content strengths and positions the new company to be one of the leading global direct-to-consumer streaming platforms. It 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. For AT&T shareholders, this is an opportunity to unlock value and be one of the best capitalized broadband companies, focused on investing in 5G and fiber to meet substantial, long-term demand for connectivity. AT&T shareholders will retain their stake in our leading communications company that comes with an attractive dividend. Plus, they will get a stake in the new company, a global media leader that can build one of the top streaming platforms in the world,” said AT&T’s CEO John Stankey.
“During my many conversations with John, we always come back to the same simple and powerful strategic principle: these assets are better and more valuable together. It is super exciting to combine such historic brands, world class journalism and iconic franchises under one roof and unlock so much value and opportunity. With a library of cherished IP, dynamite management teams and global expertise in every market in the world, we believe everyone wins…consumers with more diverse choices, talent and storytellers with more resources and compelling pathways to larger audiences, and shareholders with a globally scaled growth company committed to a strong balance sheet that is better positioned to compete with the world’s largest streamers. We will build a new chapter together with the creative and talented WarnerMedia team and these incredible assets built on a nearly 100-year legacy of the most wonderful storytelling in the world. That will be our singular mission: to focus on telling the most amazing stories and have a ton of fun doing it,” added Discovery CEO David Zaslav.