• Loading stock data...
Tuesday, May 21, 2024

Discovery-WarnerMedia Merger Clears IRS Hurdle

  • The $43 billion merger between Discovery and WarnerMedia received approval from the IRS.
  • The deal is structured to be tax-free for shareholders.
WarnerMedia/Design: Alex Brooks

The historic Discovery-WarnerMedia mega-merger will be able to proceed as structured after it received approval from the IRS.

The $43 billion deal will bring together WarnerMedia’s Turner Sports, TNT, TBS, CNN, Warner Bros., HBO, and Discovery’s Eurosport, Food Network, HGTV, and others. 

Discovery also has the rights to the Olympics across Europe through 2024 in a six-year, $1.5 billion deal, and is reportedly in talks to form a joint venture with BT Sport, which holds U.K. Premier League rights.

On Wednesday, WarnerMedia-owner AT&T revealed that the deal received a favorable rating from the IRS as a “Reverse Morris Trust,” a transaction type designed to be tax-free for shareholders.

  • Under a Reverse Morris Trust, AT&T will first spin off WarnerMedia before merging it with Discovery.
  • To remain tax-exempt, AT&T shareholders must retain a majority stake in the company. As currently structured, they will receive 71% of the new company’s shares and be able to name seven of 13 board members.
  • Discovery CEO David Zaslav and CFO Gunnar Wiedenfels will run the new company.

Not a Done Deal

While the merger received the blessing of the European Commission earlier this week, Democratic lawmakers wrote to the Department of Justice this month asking for close scrutiny of the deal. 

If completed, the combined entity will be worth around $130 billion and hold broadcast rights to the NBA, NHL, and Olympics.

Copy Link
Link Copied
Link Copied

What to Read

Historic Premier League Season Closes As U.S. Influence Expands

Man City can expect to receive roughly $79 million from the EPL’s system of merit payments.

Is There a Sneakerhead Culture for Soccer Jerseys? PE Firm Thinks So

The Chernin Group invests $38.5 million in a U.K.-based seller of vintage jerseys.

Major League Rugby’s Vision for American Rugby

How Major League Rugby is leading the Rugby renaissance in the U.S.

ESPN Narrowly Avoids Disaster on Hurricanes-Rangers Broadcast

The network briefly switched playoff games in crunch time of Canes-Rangers.
podcast thumbnail mobile
Front Office Sports Today

Bare Knuckle Fighting Comes Out of the Shadows


Featured Today


‘This Is Semi-Pro’: Inside One Arena Football League Team’s Collapse

The collapse of the Georgia Force, as told by the players who lived it.
Michael Block signs autographs on the 18th hole during day three of practice for the PGA Championship at Valhalla Golf Club on Wednesday, May 15, 2024.
May 19, 2024

‘I Prefer It This Way’: How Life Works for PGA Club Pros

Here’s how life works for the qualifiers at golf’s second major.
February 5, 2019; Washington, DC, USA; The grounds of the Capitol Building empty out following the conclusion of President Donald Trump's State of the Union speech on February 5, 2019.
May 18, 2024

‘A Breathtaking Lobbying Campaign’: The NCAA’s Sophisticated Effort to Save Amateurism

Inside the carefully coordinated, multimillion-dollar operation to end the athletes’ rights era.
May 14, 2024

The WNBA Was Forged in Houston. Why Won’t It Go Back There?

Houston’s a perfect fit for expansion. The league isn’t considering it yet.


Powered By

Careers in Sports

Looking for a new job? Check out these featured listings and search for openings all over the world.
Live Nation
Multiple - USA Careers
Multiple - USA Careers
Multiple - USA Careers

How an ‘Extremely, Extremely Rare’ Contract Created the Villanova Knicks

Josh Hart’s second contract was unique in its structure, his agent and an expert say.
April 23, 2024

Caitlin Clark’s Nike Deal Reportedly Worth $28 Million Over Eight Years

The deal would become the largest for a women’s basketball player.
May 6, 2024

Potential Everton Buyer Accused of Enormous Fraud in Lawsuit

Miami-based 777 Partners faces its biggest legal blow yet.

Major League Rugby’s Vision for American Rugby

How Major League Rugby is leading the Rugby renaissance in the U.S.
April 22, 2024

Apple Reportedly Close To Winning Broadcast Rights for Club World Cup

Apple’s deal would be FIFA’s first single worldwide broadcast contract.
April 19, 2024

Memphis and FedEx Strike Unique Corporate NIL Deal For $25 Million

The logistics company has a long-standing relationship with the university.
April 18, 2024

NBA Media Rights Likely Headed for Open Market Next Week

The league is reportedly letting Monday’s deadline pass without a deal.
April 18, 2024

Caitlin Clark ‘Nearing’ $20 Million-Plus Nike Deal: Report

Clark had an NIL deal with Nike at Iowa as well.