AT&T-Discovery Merger Creates $130B Media Giant

    • AT&T is spinning off WarnerMedia into a public company that is merging with Discovery into a $130 billion media giant.
    • The move is a change of direction for AT&T away from its major media play.

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It doesn’t have a name yet, but there’s a new media company in the works that will be bigger than Netflix.

TNT, TBS, and Bleacher Report are among the many major media assets transferring to a new parent company as AT&T spins off WarnerMedia and merges it with Discovery. The combined company is expected to have a market value around $130 billion.

WarnerMedia and Discovery combined for $41 billion in sales and over $10 billion in operating profit last year — more than Netflix ($25 billion in 2020 revenue) and NBCUniversal ($28 billion). 

With TNT and TBS, the new media monolith will inherit NBA and NHL media rights including playoff games through 2024-2025 and 2027-2028, respectively. MLB coverage runs through 2028 at $535 million per year. The NBA’s deal with Turner Sports is believed to be for around $2.6 billion annually.

  • WarnerMedia also includes CNN, HBO, streaming service HBO MAX, comic giant DC, and Warner Bros.
  • Discovery owns its namesake channel and streaming service Discovery+, along with HGTV, the Food Network, Animal Planet, and Oprah Winfrey’s OWN.

The move is an abrupt about-face for AT&T, which spent $85 billion on Time Warner less than three years ago.

AT&T will receive $43 billion in the deal, which splits the new entity 71% to 29% between AT&T and Discovery’s shareholders.