Beautiful Virgin Islands

Sunday, Oct 19, 2025

AT&T to spin off and combine WarnerMedia with Discovery in deal that would create streaming giant

AT&T to spin off and combine WarnerMedia with Discovery in deal that would create streaming giant

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. "I think we fit together like a glove," Zaslav said at a virtual press conference.

On one level, the tie-up is a logical way to better compete with Netflix and Disney, the two top streaming players. "Scale" is the word AT&T CEO John Stankey used repeatedly in interviews on Monday.

On another level, the transaction 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.

A spin-off will help AT&T prioritize its broadband business and pay down its huge debt load. "AT&T would receive $43 billion (subject to adjustment) in a combination of cash, debt securities, and WarnerMedia's retention of certain debt," Monday's announcement said. Zaslav said Monday the new media company will start with $55 billion in debt.

AT&T's shareholders will get the majority of the shares in the combined company, at 71%, while Discovery's shareholders will get 29%.
Shares of AT&T were up about 2% in morning trading. Shares of Discovery, which popped as much as 16% pre-market, were down about 2%.

Now this new company needs a name


The executives leading the transaction said they'll announce a name for the spun-off company later this week. They expect the deal to take effect in mid-2022.

Prominent Wall Street analysts said the deal made strategic sense. "In short order," Craig Moffett of MoffettNathanson wrote, "the new company will be able to join the upper tier" of global streaming service players.

In an interview with CNN's Poppy Harlow, Zaslav said that "'more' does make a difference," meaning more programming available in more ways.

"We think if you can take our content" at Discovery "together with the great content on HBO Max as well as the amazing production coming out of Warner Bros, that we'll have something that is truly unique," he said.

Added scale is also a factor in the cable television businesses that made both WarnerMedia and Discovery into media behemoths in the first place.

Cable remains hugely profitable, though the businesses are under pressure due to cord-cutting and streaming.

The Discovery-Warner portfolio will include six of the top-rated eight channels on cable in key advertiser demographics: CNN, TNT, TBS, ID, HGTV, and Food Network. This could give the company more leverage in negotiations with distributors and ad buyers.

AT&T slimming down


Bloomberg News broke the news of the impending deal on Sunday. Zaslav and Stankey indicated Monday that the pairing had been in the works for months.

In many quarters the news is being seen as AT&T admitting defeat after an ill-fated attempt to bring content and distribution together.

Earlier this year AT&T also struck a deal to carve out its satellite business DirecTV at a significant loss from the 2015 purchase price.

And another telecom giant, Verizon, threw in the towel on its content efforts as well, agreeing to sell Yahoo and AOL for $5 billion.

Of course, the media world looks very different today than it did just a few years ago.

"We are now in a world where relevance and future success will be tied to greater scale and growth globally," Stankey said in a memo to WarnerMedia staffers. "To be one of the best global media companies requires not only broad and deep creative assets, but an investor base and access to capital to make it happen. The decision to combine WarnerMedia with Discovery is rooted in this conclusion."

Discovery's nonfiction-focused streaming service launched in January, utilizing a library of shows from channels like TLC and Animal Planet. At the time, Zaslav told CNN that discovery+ was a "great complement to someone who has Disney (DIS) or Netflix (NFLX), or HBO, Disney and Netflix."

Zaslav also emphasized Discovery's global reach. HBO Max, currently available in the US, is about to make an international push. Stankey said the combination will support HBO Max's global growth "and create efficiencies which can be re-invested in producing more great content to give consumers what they want."

Zaslav said Discovery and Warner currently spend a total of $20 billion a year on content. Netflix plans to spend at least $17 billion on content this year.

"Executives from both companies" will be in "key leadership roles," according to the press release. WarnerMedia CEO Jason Kilar was not mentioned in the announcement, but Zaslav signaled that Kilar may remain with the company. "Jason is a fantastic talent," Zaslav said.

Zaslav also affirmed the independence of CNN's newsroom. He said he commits to "the greatest editorial integrity" for CNN and intends to fund CNN's streaming service plans.

Zaslav, a longtime friend of CNN Worldwide chief Jeff Zucker, said at the press conference, "We love CNN... We think one of the true differentiators of the future is live news, live sports."

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
S&P Downgrades France’s Credit Rating, Citing Soaring Debt and Political Instability
Ofcom Rules BBC’s Gaza Documentary ‘Materially Misleading’ Over Narrator’s Hamas Ties
Diane Keaton’s Cause of Death Revealed as Pneumonia, Family Confirms
Former Lostprophets Frontman Ian Watkins Stabbed to Death in British Prison
"The Tsunami Is Coming, and It’s Massive": The World’s Richest Man Unveils a New AI Vision
Outsider, Heroine, Trailblazer: Diane Keaton Was Always a Little Strange — and Forever One of a Kind
Dramatic Development in the Death of 'Mango' Founder: Billionaire's Son Suspected of Murder
Two Years of Darkness: The Harrowing Testimonies of Israeli Hostages Emerging From Gaza Captivity
EU Moves to Use Frozen Russian Assets to Buy U.S. Weapons for Ukraine
Europe Emerges as the Biggest Casualty in U.S.-China Rare Earth Rivalry
HSBC Confronts Strategic Crossroads as NAB Seeks Only Retail Arm in Australia Exit
U.S. Chamber Sues Trump Over $100,000 H-1B Visa Fee
Shenzhen Expo Spotlights China’s Quantum Step in Semiconductor Self-Reliance
China Accelerates to the Forefront in Global Nuclear Fusion Race
Yachts, Private Jets, and a Picasso Painting: Exposed as 'One of the Largest Frauds in History'
Australia’s Wedgetail Spies Aid NATO Response as Russian MiGs Breach Estonian Airspace
McGowan Urges Chalmers to Cut Spending Over Tax Hike to Close $20 Billion Budget Gap
Victoria Orders Review of Transgender Prison Placement Amid Safety Concerns for Female Inmates
U.S. Treasury Mobilises New $20 Billion Debt Facility to Stabilise Argentina
French Business Leaders Decry Budget as Macron’s Pro-Enterprise Promise Undermined
Trump Claims Modi Pledged India Would End Russian Oil Imports Amid U.S. Tariff Pressure
Surging AI Startup Valuations Fuel Bubble Concerns Among Top Investors
Australian Punter Archie Wilson Tears Up During Nebraska Press Conference, Sparking Conversation on Male Vulnerability
Australia Confirms U.S. Access to Upgraded Submarine Shipyard Under AUKUS Deal
“Firepower” Promised for Ukraine as NATO Ministers Meet — But U.S. Tomahawks Remain Undecided
Brands Confront New Dilemma as Extremists Adopt Fashion Labels
The Sydney Sweeney and Jeans Storm: “The Outcome Surpassed Our Wildest Dreams”
Erika Kirk Delivers Moving Tribute at White House as Trump Awards Charlie Presidential Medal of Freedom
British Food Influencer ‘Big John’ Detained in Australia After Visa Dispute
ScamBodia: The Chinese Fraud Empire Shielded by Cambodia’s Ruling Elite
French PM Suspends Macron’s Pension Reform Until After 2027 in Bid to Stabilize Government
Orange, Bouygues and Free Make €17 Billion Bid for Drahi’s Altice France Telecom Assets
Dutch Government Seizes Chipmaker After U.S. Presses for Removal of Chinese CEO
Bessent Accuses China of Dragging Down Global Economy Amid New Trade Curbs
U.S. Revokes Visas of Foreign Nationals Who ‘Celebrated’ Charlie Kirk’s Assassination
AI and Cybersecurity at Forefront as GITEX Global 2025 Kicks Off in Dubai
DJI Loses Appeal to Remove Pentagon’s ‘Chinese Military Company’ Label
EU Deploys New Biometric Entry/Exit System: What Non-EU Travelers Must Know
Australian Prime Minister’s Private Number Exposed Through AI Contact Scraper
Ex-Microsoft Engineer Confirms Famous Windows XP Key Was Leaked Corporate License, Not a Hack
China’s lesson for the US: it takes more than chips to win the AI race
Australia Faces Demographic Risk as Fertility Falls to Record Low
California County Reinstates Mask Mandate in Health Facilities as Respiratory Illness Risk Rises
Israel and Hamas Agree to First Phase of Trump-Brokered Gaza Truce, Hostages to Be Freed
French Political Turmoil Elevates Marine Le Pen as Rassemblement National Poised for Power
China Unveils Sweeping Rare Earth Export Controls to Shield ‘National Security’
The Davos Set in Decline: Why the World Economic Forum’s Power Must Be Challenged
France: Less Than a Month After His Appointment, the New French Prime Minister Resigns
Hungarian Prime Minister Viktor Orbán stated that Hungary will not adopt the euro because the European Union is falling apart.
Sarah Mullally Becomes First Woman Appointed Archbishop of Canterbury
×