WarnerMedia’s Getting Merged Again — This Time With Discovery

by Erik Amaya

One thing we’ve noticed in the history of Warner Bros is its tendency to throw off whoever buys it. In some cases, it simply absorbs the corporation in question. More often, though, it eventually sells off their former corporate owner, like it did when it spun off AOL in 2009. And, really, the AOL misadventure should’ve been a key warning sign to AT&T that it could not tame the wild animal that is Warners with its bottom line mentality; but they failed to see how foolhardy it is for a tech giant to try to run a film and television juggernaut. And so, just as quickly as they ran into the media world, the telecommunications giant is backing out of it. According to The Los Angeles Times, the company will divest itself of WarnerMedia in a joint venture with Discovery Networks totaling some $43 billion.

Although AT&T will still have a 71% stake in the new Warner organization, both the LA Times and Hollywood Reporter coverage makes it clear that Discovery’s top management — Chairman John Malone and Chief Executive David Zaslav — will become the top oversight of whatever Warner-branded company emerges from the sale.

Of course, the deal is not set in stone. Shareholders at AT&T and Discovery need to approve the merger and it must past regulatory scrutiny. Although, industry analysts already suspect the plan will have an easier time getting through the latter than AT&T faced during the previous presidential administration. Also, it seems the sell-off of Warners is something many of AT&T’s largest shareholders have wanted for sometime.

Which may leave you wondering why the telephone company even bothered with Warners in the first place. As THR points out, they laid off a lot of people and encouraged a lot of key Warner management to depart in the last two years, draining a lot of institutional talent away in their plan to build a Netflix rival. But with HBO Max’s “botched” launch, cold feet set in quick and, thus, an escape route seemingly orchestrated by Malone, who was already looking to consolidate Discovery with another media player.

Now, while that’s all well-and-good at the corporate level with the executives no doubt getting handsome bonuses for their trouble, where does that leave the pieces of the Warner table we’re interested in? For HBO, we imagine business as usual. Though some long-time executives left awhile back, Casey Bloys remains as a key creative executive, shepherding the constant stream of Game of Thrones spinoff projects and whatever other prestige dramas they have in the pipeline.

Then there’s DC Comics, a division more or less neutered in the last year because AT&T did not want to be a publisher. It remains to be seen if Discovery will be similar uninterested or if it will recognize the value of an in-house idea factory. DC Entertainment’s film calendar — at long last in a reasonable state — should remain affected by the top-level changes.

Meanwhile, all of WarnerMedia must carry on as though sell-off will not go through, so its various film, television, and streaming initiatives will continue as before. Although, if the company’s recent history is any indication, expect the approval process to be complete just before DC FanDome in October with the planners of that event once again scrambling at the last minute to delete announcements and other presentations.

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