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Warner Bros. Discovery

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Warner Bros. Discovery, Inc.
Company typePublic
Industry
Predecessors
FoundedApril 8, 2022; 2 years ago (2022-04-08)
Headquarters
United States
Area served
Worldwide
Key people
Websitewbd.com
Footnotes / references
[1][2]

Warner Bros. Discovery, Inc.[3] is an American multinational mass media and entertainment conglomerate. The company was formed through the merger of WarnerMedia and Discovery, Inc., completed on April 8, 2022.[1] The company's name is a combination from the flagship property of WarnerMedia,Warner Bros. film studio, and the Discovery Channel pay TV network.

History

Beginning

On May 16, 2021, Bloomberg News reported that AT&T was in talks with Discovery, Inc. for it to merge with WarnerMedia, the parent company of Warner Bros., to form a publicly-traded company that would be divided between its shareholders.[4][5]

On May 17, 2021, AT&T announced that it had agreed to dispose its equity stake in wholly-owned media and entertainment subsidiary WarnerMedia (the former Time Warner, which AT&T acquired in 2018 for just over US$85 billion in an attempt to become a vertically integrated media conglomerate) and merge it with Discovery Inc. to form a new company, which is subject to regulatory approval. The merger, scheduled to be completed in mid-2022, will be structured as a Reverse Morris Trust with AT&T shareholders holding a 71% interest in the new company's stock and appointing seven board members, and Discovery shareholders holding a 29% interest and appointing six board members. AT&T will receive US$43 billion in cash and debt from the spin-off.[6][7][8]

The new company will be led by Discovery's current CEO, David Zaslav, while WarnerMedia's CEO Jason Kilar's position in the new company is uncertain.[6] Zaslav stated that the two companies spend a combined US$20 billion annually on content (outpacing Disney, Netflix and Amazon.com). The company will aim to expand their streaming services, which includes WarnerMedia's HBO Max, to reach 400 million global subscribers.[7]

Formation

On June 1, 2021, it was announced that the merged company would be known as Warner Bros. Discovery, and an interim wordmark was unveiled with the tagline "The stuff that dreams are made of", a line from the 1941 Warner Bros. film, The Maltese Falcon. Zaslav explained that the company aimed to be the "most innovative, exciting and fun place to tell stories in the world", and would combine Warner Bros.' "fabled hundred-year legacy of creative, authentic storytelling and taking bold risks to bring the most amazing stories to life" with Discovery's "integrity, innovation and inspiration."[9][10]

On December 22, 2021, the transaction was approved by the European Commission.[11][12] On January 5, 2022, The Wall Street Journal reported that WarnerMedia and Paramount Global (at the time named ViacomCBS) were exploring a possible sale of either a majority stake or all of The CW, and that Nexstar Media Group (which became The CW's largest affiliate group when it acquired former WB co-owner Tribune Broadcasting in 2019) was considered a leading bidder.[13] The news led to speculation that, should a sale take place, new ownership could steer the network in a new direction, transforming The CW from a young adult-oriented network into one that featured more unscripted and even national news programming.[14] However, reports also indicated that WarnerMedia and ViacomCBS could include a contractual commitment that would require any new owner to buy new programming from those companies, allowing them to reap some continual revenue through the network.[15] Network president/CEO Mark Pedowitz confirmed talks of a potential sale in a memo to CW staffers, but added that "It's too early to speculate what might happen" and that the network "must continue to do what we do best."[16][17]

On January 26, 2022, AT&T CEO John Stankey stated that the merger was expected to close sometime during the second quarter of 2022.[18][19] On February 1, 2022, it was reported that AT&T had finalized the structure of the merger: WarnerMedia would be spun off pro rata to AT&T's shareholders, and then merge with Discovery Inc. to form the new company.[20][21] The transaction was approved by the Brazilian antitrust regulator Cade on February 7,[22] followed by the United States Department of Justice on February 9.[23]

On March 11, 2022, the merger was approved by Discovery's shareholders. Due to the structure of the merger, it does not require separate approval from AT&T shareholders.[24][25] In an SEC filing on March 25, 2022, AT&T stated that two-way trading of WBD stock with that of AT&T would begin on April 4, 2022, and that a special dividend will be issued the next day to give AT&T shareholders a 0.24 share in WBD for each share of AT&T common stock they hold. The filing does not include a specific consummation date.[26] On April 6, 2022, Variety reported that the merger could be completed as early as April 8.[27][1]

Integration of HBO Max and Discovery+

In November 2021 during an earnings call, Discovery Streaming CEO JB Perrette discussed possible options for its Discovery+ streaming service post-merger, including bundling the service with HBO Max and eventually merging them under a single platform with a mixture of both companies' technologies. He also noted that WBD may prioritize launching Discovery+ and HBO Max as a unified platform in markets where Discovery+ has yet to launch, such as another parts of Asia-Pacific.[28] On March 14, 2022, Discovery CFO Gunnar Wiedenfels—who will assume the same position post-merger—confirmed that such a transition was a long-term goal.[29]

Future assets

Future leadership

References

  1. ^ a b c Maas, Jennifer (April 6, 2022). "Discovery Makes Big WarnerMedia Executive Suite Changes Ahead of Merger; Toby Emmerich and Gerhard Zeiler to Remain". Variety. Penske Media Corporation. Retrieved April 8, 2022. As Variety previously reported, insiders first thought the transaction between Discovery and WarnerMedia's current owner AT&T would be formally completed on April 11, but now sources say the deal will likely close as early as end of day this Friday.
  2. ^ Szalai, Georg (June 17, 2021). "Cash Never Lies: Meet the Discovery CFO Targeting $3B in Savings in the Warner Merger". The Hollywood Reporter. Retrieved April 4, 2022.
  3. ^ "AT&T Announces Details for Completion of WM Spin-Off". AT&T. March 25, 2022. Retrieved March 26, 2022.
  4. ^ Hammond, Ed (May 16, 2021). "AT&T Is Preparing to Merge Media Assets With Discovery". Bloomberg News. Retrieved June 2, 2021.
  5. ^ Sherman, Alex (May 16, 2021). "AT&T in advanced talks to merge WarnerMedia with Discovery, deal expected as soon as Monday". CNBC. Retrieved June 2, 2021.
  6. ^ a b Hammond, Ed; Turner, Nick (May 17, 2021). "AT&T's WarnerMedia, Discovery to Merge in Blockbuster Deal". Bloomberg News. Retrieved June 2, 2021.
  7. ^ a b Kovach, Steve; Meredith, Sam (May 17, 2021). "AT&T announces $43 billion deal to merge WarnerMedia with Discovery". CNBC. Retrieved June 2, 2021.
  8. ^ Hayes, Dade (May 17, 2021). "David Zaslav And John Stankey Outline Plans For Merging Discovery And WarnerMedia, Addressing Future Of Jason Kilar, CNN, Streaming". Deadline Hollywood. Retrieved June 2, 2021.
  9. ^ Palmeri, Christopher (June 1, 2021). "Warner Bros. Discovery Will Be Name of Company Shorn From AT&T". Bloomberg News. Retrieved June 2, 2021.
  10. ^ Goldsmith, Jill (June 1, 2021). "Warner Bros. Discovery Set As Name Of Merged Company". Deadline Hollywood. Retrieved June 2, 2021.
  11. ^ Vlessing, Etan (December 22, 2021). "Discovery-WarnerMedia Merger Gets European Union Approval". The Hollywood Reporter. Retrieved December 22, 2021.
  12. ^ "European Commission grants approval for Discovery acquisition of WarnerMedia". Reuters. December 22, 2021. Retrieved December 22, 2021.
  13. ^ Flint, Joe (January 5, 2022). "WarnerMedia and ViacomCBS Are Exploring Possible Sale of CW Network". The Wall Street Journal. Retrieved January 6, 2022.
  14. ^ Weprin, Alex; Goldberg, Lesley (January 12, 2022). "Will The CW Be a Streaming Wars Casualty?". The Hollywood Reporter. Retrieved January 12, 2022.
  15. ^ Farley, Ashley (January 13, 2022). "REPORT: The CW's Potential Sale May Kill Its Original Programming". Comic Book Resources. Retrieved January 14, 2022.
  16. ^ Goldberg, Lesley; Weprin, Alex (January 6, 2022). "ViacomCBS and WarnerMedia Exploring Sale of The CW". The Hollywood Reporter. Retrieved January 9, 2022.
  17. ^ Andreeva, Nellie (January 6, 2022). "The CW CEO Mark Pedowitz Confirms WarnerMedia & ViacomCBS Exploring "Strategic Opportunities" As Majority Stake In Network Is Shopped With Nexstar Among Suitors" As Majority Stake In Network Is Shopped With Nexstar Among Suitors – Update". Deadline Hollywood. Retrieved January 6, 2022.
  18. ^ Hepburn, Tmera (January 26, 2022). "WarnerMedia and Discovery Merger Now Expected to Close This Spring". Cord Cutters News. Retrieved January 27, 2022.
  19. ^ Pinto, Jordan (January 27, 2022). "WarnerMedia-Discovery merger expected to close in Q2, says AT&T's Stankey". C21 Media. Retrieved January 27, 2022.
  20. ^ Spangler, Todd (February 1, 2022). "AT&T Sets Plan to Spin Off WarnerMedia in $43 Billion Deal". Variety. Penske Media Corporation. Retrieved February 1, 2022.
  21. ^ Szalai, George (February 1, 2022). "AT&T Picks WarnerMedia Spin-Off as Structure for Key Step in Discovery Merger". The Hollywood Reporter. Penske Media Corporation. Retrieved February 1, 2022.
  22. ^ "Cade surpreende e aprova fusão Discovery/WarnerMedia sem restrições". Notícias da TV (in Portuguese).
  23. ^ Szalai, Georg (February 9, 2022). "Discovery-WarnerMedia Merger Gets U.S. Antitrust Clearance". The Hollywood Reporter. Penske Media Corporation. Retrieved February 9, 2022.
  24. ^ Goldsmith, Jill (February 10, 2022). "Discovery Sets March 11 For Shareholder Vote On WarnerMedia Merger". Deadline Hollywood. Penske Media Corporation. Retrieved February 10, 2022.
  25. ^ "Discovery Shareholders Approve $43 Billion WarnerMedia Merger". Variety. Penske Media Corporation. Retrieved Mar 11, 2022.
  26. ^ Hayes, Dade (2022-03-25). "AT&T Sets More Details For WarnerMedia Spinoff Ahead Of Discovery Merger". Deadline. Retrieved 2022-03-29.
  27. ^ Mass, Jennifer (April 5, 2022). "Discovery-WarnerMedia Merger Could Close as Early as This Friday (EXCLUSIVE)". Variety. Penske Media Corporation. Archived from the original on April 6, 2022. Retrieved April 6, 2022.
  28. ^ Bunson, Ben (November 3, 2021). "Discovery+, HBO Max may bundle before combining after merger". FierceVideo. Retrieved November 11, 2021.
  29. ^ Maas, Jennifer (2022-03-14). "HBO Max and Discovery Plus Will Be Combined Into One Platform". Variety. Retrieved 2022-03-16.
  30. ^ Vlessing, Etan (2022-03-15). "AT&T Names Warner Bros. Discovery Board Appointees, Including Ex-BET Chief Debra Lee". Hollywood Reporter. Retrieved 2022-04-07.
  31. ^ "Discovery, Inc. Announces Future Leadership Team for Warner Bros. Discovery". Discovery. 2022-04-07. Retrieved 2022-04-07.
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