What you need to know about the Warner Bros Discovery merger
With Discovery’s merger with AT&T complete, The Drum wraps up the key details from the landmark deal you should know.
Warner Bros Discovery has entered the entertainment market
On Friday, AT&T and Discovery completed a $43bn merger creating the mega-media conglomerate Warner Bros Discovery. The closure of the deal introduces the biggest pure entertainment brand to market, which includes two global streamers and too many broadcast and cable channels to count.
In May 2021, after four tumultuous years, WarnerMedia’s holding company AT&T struck a deal with Discovery to create a new media entity and then relinquish control of the business it paid $85bn for. Along with HBO Max and Discovery+, the combined business now encompasses the Warner Bros film franchises and Discovery’s portfolio of lifestyle channels including HGTV, Food Network and Animal Planet, as well as AT&T properties CNN and TNT.
On the company’s first day of trading shares steadily rose by 0.8% at $24.62 a share and AT&T saw its shares increase by 2%, showing confidence in the ownership change.
Veteran Discovery chief exec David Zaslav has assumed control over the merged business. He said: “With our collective assets and diversified business model, Warner Bros Discovery offers the most differentiated and complete portfolio of content across film, television and streaming. We are confident that we can bring more choice to consumers around the globe while fostering creativity and creating value for shareholders.”
The first major indication of Warner Bros Discovery’s content plans will come at its combined upfronts presentation on May 18 at Madison Square Garden’s Hulu Theater. The presentation is expected to showcase its differentiated portfolio to clients, agencies, investors and sell-side analysts.
In a company statement, Warner Bros Discovery touted that its ad solutions “include the strength of what both former organizations offered clients including advanced advertising scale, data-driven linear and programmatic, sponsored synergies and the best ad-light streaming services that extend into both cable and non-cable homes.”
New leadership ranks
On a $3bn cost-saving mission, the two businesses have already started purging its US C-suite of duplicated roles. One studio insider told Deadline the cull could save north of $70m alone.
Jon Steinlauf will oversee sales, reporting to Bruce Campbell, who takes the post of chief revenue and strategy officer – both former Discovery execs. Steinlauf was appointed the position over WarnerMedia’s head of ad sales JP Colaco. As a result, Colaco will leave the business.
On his appointment, Steinlauf said: “Warner Bros Discovery will offer advertisers the most complementary portfolio of brands – spanning news, sports, entertainment, scripted, unscripted and family-focused programming. Together, we will introduce unparalleled ad-supported streaming opportunities to our clients. I’ve spent the last 30 years of my career at Turner, Scripps and Discovery and have the utmost respect for the Warner brands.”
Other key appointments include Gunnar Wiedenfels as chief financial officer and Jean-Briac Perrette, president of Warner Bros Discovery Global Streaming and Interactive Entertainment, with responsibility for HBO Max and Discovery+.
Discovery+ and HBO Max join forces
Pre-merger it was revealed Discovery+ and HBO Max will eventually be combined into a single streamer with ad-free and ad-light options, rather than offering the two services as a bundle. The company’s current subscriber numbers would top 100 million, with Discovery+ Q4 2021 numbers at 22 million subscribers and HBO Max and HBO with 73.8 million.
Wiedenfels previously said a bundle will be offered in the interim while the company builds out a merged streaming service. “Right out of the gate, we’re working on getting the bundling approach ready,” Wiedenfels said. “The main thrust is going to be harmonizing the technology platform. Building one very, very strong combined direct-to-consumer (D2C) product and platform, that’s going to take a while.”
We caught up with Discovery UK and Nordic’s boss James Gibbons pre-merger to discuss all things Discovery+ – listen here.