The streaming TV race is about to get even more competitive.
On Monday morning AT&T ( T) and Discovery, Inc. ( DISCA) announced a deal under which AT&T’s WarnerMedia will be spun off and combined with Discovery in a new standalone media company. The deal, subject to regulatory approval, will combine two treasure troves of content, including the HBO Max and discovery+ streaming services. CNN will be included in the transaction. Discovery CEO David Zaslav will run the combined business, according to Monday’s announcement. “Executives from both companies” will be in “key leadership roles” according to a press release. On one level, the tie-up is a logical way to compete with Netflix and Disney, the two top streaming players. On another level, it is also a complex way for AT&T to unwind its 2016 bid for Time Warner, which took effect in 2018, with the assets named WarnerMedia. The companies said they expect this deal to take effect in mid-2022. AT&T’s shareholders would get the majority of the shares in the combined company, at 71%, while Discovery’s shareholders would get 29%.
