• By The Financial District

AT&T NEARS DEAL TO SNAP UP DISCOVERY, CREATE MEDIA GIANT

US telecoms giant AT&T is nearing a deal to combine its media assets, including CNN and HBO, with Discovery Inc., the owner of lifestyle TV networks such as HGTV and TLC, according to news reports citing unnamed sources, Reuters reported on May 17, 2021.

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The deal would mark the unwinding of AT&T's $108.7 billion acquisition of US media conglomerate Time Warner in 2018, and it would underscore its recognition that TV viewership has moved to streaming, where scale is required to take on the likes of Netflix Inc. and Walt Disney Co.


The combination would create a new company separate from AT&T that could be valued at $150 billion, including debt, the Financial Times reported. Discovery currently has a market value including debt of about $30 billion.


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A deal could be announced later this week, according to Bloomberg News, which first reported the news.


The proposed deal would put together one of Hollywood's most powerful studios, home to the Harry Potter and Batman franchises, with Discovery's stable of unscripted home, cooking, and nature and science shows.


With the acquisition of Time Warner, AT&T sought to create a media and telecoms powerhouse combining content and distribution. Yet this proved a costly strategy as it simultaneously sought to expand next-generation wireless services, most recently borrowing $14 billion to buy more wireless spectrum.


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AT&T has been seeking to unwind its debt-laden acquisitions and lighten its balance sheet. In February, it agreed to sell a third of satellite TV service DirecTV, which it purchased in 2015 for about $68 billion, to TPG Capital in a deal valuing the business at $16.25 billion.


HBO and HBO Max now have 63.9 million global subscribers, compared with more than 100 million for Walt Disney Co's Disney+ and 207.6 million for Netflix. Discovery, whose portfolio includes Animal Planet and the Discovery Channel, reaches 88.3 million homes in the United States. Its streaming service Discovery+ which launched in January has 15 million subscribers.



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Happyornot makes feedback terminals measuring customer satisfaction sing smiley-face buttons.
Happyornot makes feedback terminals measuring customer satisfaction sing smiley-face buttons.