AT&T in Talks With Discovery to Spin Off WarnerMedia Entertainment Assets

Talks come after companies launch competing streamers HBO Max and Discovery+

HBO Max WarnerMedia Investor Day Presentation
BURBANK, CALIFORNIA – OCTOBER 29: John Stankey, President

AT&T is in advanced talks to spin off its WarnerMedia entertainment assets and merge them with Discovery Inc. in a move that could alter the ongoing competition between streaming services, Bloomberg reported on Sunday.

According to Bloomberg, the companies are in talks to bring their vast entertainment portfolios together. AT&T’s WarnerMedia includes networks like HBO, CNN, TNT, TBS and the HBO Max streaming service, while Discovery brings its own streaming service, Discovery+, along with networks like HGTV, Discovery Channel, Animal Planet, Food Network and TLC.

It is unclear how large the scope of the potential merger would be or if it would impact the two fledgling streamers. The rise of multiple streaming services has led to bundle offers like Disney’s package of Disney+, Hulu and ESPN+ while others have merged entirely, as the WWE Network shut down in the U.S. last month and moved its live and archived content to NBCUniversal’s Peacock.

A deal could be announced as early as this week, Bloomberg reported, possibly during this week’s annual television upfronts. Discovery is scheduled to hold its presentation on Tuesday while WarnerMedia will hold its presentation on Wednesday. Reps for AT&T and Discovery did not immediately respond to TheWrap’s requests for comment.

The deal comes as HBO Max continues its rollout since its launch a year ago, offering all of Warner Bros.’ 2021 films the same day they are released in theaters with plans to introduce a cheaper ad-supported tier later this year. The service will also be launched worldwide in June. Combined with HBO, the service has accumulated over 44 million subscribers, adding 2.7 million this past quarter.

Discovery+, meanwhile, was launched in January, accumulating 13 million subscribers with its offering of unscripted original programming as well as streaming on-demand of hit shows on the companies’ networks like “Fixer Upper” and “Deadliest Catch.” A merger or bundling partnership of the two streamers would be the latest phase in a growing trend of media consolidation following Disney’s purchase of 20th Century Fox in 2019 and Discovery’s own purchase of Scripps Networks the year prior for $14.6 billion.

The move also would be a reversal of AT&T’s strategy of bolstering its core telecom business with content creation following the $85 billion acquisition of Time Warner that it concluded three years ago. Since that acquisition, AT&T has shed other assets — including the 30% sale of DirecTV to equity firm TPG for $7.8 billion, six years after the company acquired the satellite TV provider for $49 billion.


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