Apr 8, 2022 - Economy

Discovery and WarnerMedia close $43 billion merger

Illustration: Annelise Capossela/Axios

AT&T and Discovery have closed their $43 billion deal that will combine Discovery with WarnerMedia, the company confirmed in an internal memo that was reviewed by Axios.

Why it matters: Warner Bros. Discovery, as the newly combined company will be known, immediately becomes one of the entertainment industry's biggest players alongside Disney and Netflix.

Details: Discovery president and CEO David Zaslav will lead the new company.

  • Warner Bros. Discovery will house under one roof: Warner Bros. studio, cable channels including TNT, TBS, Discovery, HGTV and premium network HBO, and a trio of streaming services in HBO Max, Discovery+ and CNN+.
  • Zaslav installed most of his Discovery leadership into similar positions with Warner Bros. Discovery, with J.B. Perrette leading the streaming business, Gunnar Wiedenfels as CFO and Kathleen Finch in charge of cable networks.
  • Jon Steinlauf will serve as chief U.S. advertising sales officer.
  • Warner Bros. Discovery still needs heads of sports and diversity and inclusion.
  • WarnerMedia let go of nine top execs ahead of the deal's closing: HBO Max chief Andy Forssell, CRO Tony Goncalves, CTO Richard Tom, CFO Jennifer Biry, exec vp and chief human resources officer Jim Cummings, exec vp communications and chief inclusion officer Christy Haubegger, WarnerMedia general counsel Jim Meza, Warner Bros. chair and CEO Ann Sarnoff and WarnerMedia CEO Jason Kilar.
  • Those remaining with the new company include Warner Bros. Pictures Group chairman Toby Emmerich, Warner Bros. TV group chairman Channing Dungey, International president Gerhard Zeiler and HBO and HBO Max chief content officer Casey Bloys. Chris Licht was previously named head of CNN after Jeff Zucker's ouster.

By the numbers: The combined value of the company will be $130 billion. Warner Bros. Discovery's anticipated 2023 revenue is approximately $52 billion, with $15 billion expected from direct-to-consumer revenue.

Catch up quick: It was only four years ago that AT&T closed its $85 billion deal for then-Time Warner. This move marks AT&T's off-ramp from Hollywood after a very short stay.

  • AT&T CEO John Stankey (who was also WarnerMedia's first CEO) has spent the last two years unwinding his predecessor Randall Stephenson's acquisitions, which also included a spin off of DirecTV.

What's next: Warner Bros. Discovery will begin trading on the Nasdaq next week under the stock ticker "WBD."

  • Discovery executives have confirmed they plan to roll up Discovery+ and HBO Max into a combined offering, along with CNN+. That's likely to start out as a bundle, similar to how Disney sells Disney+, Hulu and ESPN+.
  • Warner Bros. Discovery will also quickly get to make its pitch to advertisers with Upfront season on the horizon.
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