Discovery, AT&T to Merge Media Assets

AT&T and Discovery Inc. today announced a deal to merge AT&T’s WarnerMedia unit with Discovery, creating a streaming giant including the HBO Max and Discovery+ properties.

According to a Discovery press release, under the terms of the agreement, AT&T would receive $43 billion in a combination of cash, debt securities, and WarnerMedia’s retention of certain debt, and AT&T’s shareholders would receive stock representing 71% of the new company. Discovery shareholders would own 29% of the new company.

The Boards of Directors of both AT&T and Discovery have approved the transaction.

Both companies announced that Discovery President and CEO David Zaslav will lead the proposed new company.

“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,” Discovery President and CEO David Zaslav said in a statement. “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.”

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“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,” said AT&T CEO John Stankey. “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.”

Discovery sold its downtown Silver Spring headquarters in 2018 and relocated to New York City in 2019. The company maintains its Maryland Network Hub at 8401, 8403, and 8405 Colesville Road, in the Silver Spring Metro Plaza complex.

The former Discovery headquarters building, which is now known by Inventa Towers, is currently owned by a joint venture of Foulger-Pratt, based in Potomac, and Cerberus Capital Management, a New York private investment firm. Tenants include Children’s National Health System and Ana G. Méndez University.

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John Hendricks founded the company in 1985 as Discovery Channel. The company continues to operate Discovery ChannelAnimal PlanetInvestigation DiscoveryScienceTLC, and other brands.

Hendricks later founded downtown Silver Spring-based CuriosityStream, a service offering streaming documentaries, and serves as its executive chairman.

“2006 07 25 – Silver Spring – Discover Building 2” by thisisbossi is licensed under CC BY-SA 2.0

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