A $43bn entertainment mega-merger announced last month between AT&T-owned WarnerMedia and Discovery has taken a step closer to crystalizing with confirmation that the combined entity will be known as Warner Bros Discovery.
The tie-up will see WarnerMedia spun-off as a separate entity run by Discovery, taking household names such as Warner Bros, HBO, DC Comics and CNN with it to help establish a new streaming titan.
What’s in a name?
The dual identity will give viewers a hint at the diverse array of content soon to be at their fingertips as Discovery ramps up efforts to court footloose streaming viewers.
The combined group will also employ the slogan ‘The stuff that dreams are made of’, a line borrowed from the Warner Bros classic The Maltese Falcon.
A partnership of equals?
The David and Goliath mash-up ostensibly sees Discovery as the junior partner with its roster of reality TV shows, news and sports content dwarfed by the suite of characters and properties housed in WarnerMedia‘s stable.
Nevertheless, the merged business will be run by Discovery chief executive David Zaslav, who said: “We believe it will be the best and most exciting place in the world to tell big, important and impactful stories across any genre and any platform: film, television and streaming.”
Sweetening the pill is the fact that AT&T shareholders will own 71% of the new business, freeing WarnerMedia to stand on its own feet once again with the support of Discovery.
Speaking to CNBC, Discovery board member Bob Johnson said: “Streaming is going to be a content war that will require investment. Unless you have the capital to get the content and sources of content creation, you’re not going to win that battle.
“It’s going to be a period of consolidation. In my opinion there will be three, maybe four, winners, and everybody else is going to have to rethink their strategy either by selling off their library or finding a way to become a niche service.”
What happens next
Work is already well under way behind the doors of AT&T and Discovery to pave the way for the merger, which ought to be in place by the middle of next year assuming regulatory approval.
When fully unleashed, Warner Bros Discovery will hope to be greater than the sum of its parts, enabling both HBO Max and Discovery Plus to punch above their weight and challenge the dominance of Netflix and Disney Plus.
Putting his money where his mouth is, Zaslav has pledged to invest $20bn per year on content to hit ambitions of reaching 400m homes.