AT&T is throwing in the towel on getting into the entertainment business. In what appears to be just a few short years of sheer “winging it”, AT&T and Discovery Networks has announced a spin-off of media assets that will become one combined entertainment company that, today, doesn’t have a name. The reported $43 billion merger comes as HBO MAX has had a tumultuous few years of branding and pricing miscues as it attempts to thwart Netflix and Disney+. David Zaslav will run the new company with AT&T still owning a majority (71%) of the company versus Discovery (29%).
No word yet on the future status of HBO MAX and Discovery+, the two media company’s streaming services, but in a conference call this morning Zaslav had noted wanted to get to $20 billion in spending for content which is quite a bit north of what the media company is spending now with it’s paltry $2 billion (in comparison, Netflix will spend $16 billion this year). This deal is expected to close sometime in 2022.
One thing to note, the media conglomerates merging will see assimilation of various job roles. The merger will be pending approval from the DOJ.
Our Take
Recall our piece last month in the breakdown of the TV Broadcast to streaming strategies and how bad we said Adult Swim’s was currently. When Discovery+ launched, some franchises moved from TV to streaming (Ghost Adventures) while other brands like 90 Day Fiance had both a network presence as well as a streaming presence. I’ve also noticed that some of the streaming programming has had network premieres as well after a window of a few short weeks. What this could mean for Adult Swim in the future is anyone’s guess.