HBO Max and Discovery may be merged to create a "media juggernaut"

Bloomberg

AT&T is in talks with Discovery on a blockbuster entertainment deal that would combine WarnerMedia -- including CNN, HBO and HBO Max, TNT, TBS and Cartoon Network -- with Discovery's entertainment assets, including Discovery+, Discovery Channel, HGTV, Food Network, TLC, Animal Planet and Oprah Winfrey Network, according to Bloomberg News, which adds: "The companies are still negotiating the structure of a transaction, and details could change or the talks could fall apart." As The New York Times notes, the merger would create a "media juggernaut" -- a "company bigger than Netflix or NBCUniversal. WarnerMedia and Discovery together generated more than $41 billion in sales last year, with an operating profit of over $10 billion. That would have vaulted it ahead of Netflix and NBCUniversal and behind the Walt Disney Company. In other words, to compete for audiences increasingly glued to Facebook, YouTube or TikTok, media companies need to get even bigger. It could set off another round of media deals." The potential deal would also come three years after AT&T acquired Time Warner.

• UPDATE: WarnerMedia-Discovery merger is official, with Discovery CEO David Zaslav as the new leader of the combined company: AT&T announced Monday that it would spin off WarnerMedia as an independent company that will merge with Discovery Inc. While Zaslav will be the new company's CEO, WarnerMedia CEO Jason Kilar will be in charge of the company’s streaming push. “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,” AT&T CEO John Stankey said in a statement. “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.” Zaslav added: “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.”