market news

AT&T close to integrate media assets HBO & CNN with Discovery Inc

AT&T close to integrate media assets HBO & CNN with Discovery Inc

American telecom major, AT&T, Inc., is reportedly close to a deal for the combination of its media assets, comprising HBO and CNN, with Discovery, Inc. Discovery is the owner of lifestyle TV networks such as TLC and HGTV.

According to sources privy to the matter, the transaction would mark the unraveling of AT&T’s 2018 $108.7 billion takeover of American media conglomerate, Time Warner. The deal would highlight the company’s recognition that viewership has shifted from TV to streaming, where scale is needed to take on the likes of Walt Disney Co., and Netflix, Inc.

The takeover of Time Warner helped AT&T in the creation of a telecoms and media powerhouse by integrating distribution and content. Yet this proved to be a costly strategy as it simultaneously looked to extend next generation wireless services. This was done by borrowing a sum of $14 billion for purchasing more wireless spectrum.

Sources cite that AT&T has been looking to lighten its balance sheet and untwine its debt-laden takeovers. Back in February 2021, the company agreed to sell a third of DirecTV, a satellite TV service, to TPG Capital in a transaction that valued the business at $16.25 billion. The telecom company had acquired DirecTV in 2015 for a value of $68 billion.

The proposed integration would create a new company that is separate from AT&T and could have a valuation of $150 billion, inclusive of debt. Presently, Discovery has an approximate market value of nearly $30 billion, comprising debt.

Furthermore, the transaction is expected to put together one of the most powerful studios of Hollywood, home to the Batman and Harry Potter franchises, with Discovery’s stable of unscripted cooking, home, and nature and science shows.

For the record, AT&T’s HBO Max and HBO now have 63.9 million subscribers at the global level. These values are against over 207.6 million for Netflix and more than 100 million for Walt Disney Co’s Disney+.

Source credit:

About the author

Nandita Bhardwaj

Nandita holds a management degree with specialization in marketing, and boasts of a short-term experience in the field of recruitment. Following her passion for writing however, she decided to pursue a career in the field of content development. Presently, Nandita pens down news pieces for, spanning the verticals of business, finance, and technology.