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%.
