Sign up for our daily briefing

Make your busy days simpler with the Axios AM and PM newsletters. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to the Axios Closer newsletter for insights into the day’s business news and trends and why they matter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios Pro Rata

Dive into the world of dealmakers across VC, PE and M&A with Axios Pro Rata. Delivered daily to your inbox by Dan Primack and Kia Kokalitcheva.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with the Axios Sports newsletter. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with the Axios Des Moines newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with the Axios Tampa Bay newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Nashville news?

Get a daily digest of the most important stories affecting your hometown with the Axios Nashville newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Columbus news?

Get a daily digest of the most important stories affecting your hometown with the Axios Columbus newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Dallas news?

Get a daily digest of the most important stories affecting your hometown with the Axios Dallas newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Austin news?

Get a daily digest of the most important stories affecting your hometown with the Axios Austin newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Atlanta news?

Get a daily digest of the most important stories affecting your hometown with the Axios Atlanta newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Philadelphia news?

Get a daily digest of the most important stories affecting your hometown with the Axios Philadelphia newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Chicago news?

Get a daily digest of the most important stories affecting your hometown with the Axios Chicago newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios NW Arkansas

Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top DC news?

Get a daily digest of the most important stories affecting your hometown with the Axios DC newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Annelise Capossela/Axios

AT&T and Discovery have agreed to create a joint venture that would house WarnerMedia’s premium entertainment, sports and news assets with Discovery's nonfiction and international entertainment and sports businesses, the companies announced Monday.

Why it matters: It's a major course correction by AT&T. The deal essentially confirms shareholder fears that the company's $85 billion merger with Time Warner three years ago was not fully baked.

Details: The new company will be led by Discovery President and CEO David Zaslav, with a management team and top operational and creative leadership from both companies. Jason Kilar will remain as CEO of WarnerMedia.

  • The venture will have a projected 2023 revenue of approximately $52 billion, adjusted EBITDA of approximately $14 billion, and a free cash flow conversion rate of approximately 60%, per a statement. It plans to spend around $20 billion in content, which is more than Netflix currently does.
  • The new company’s board of directors will have 13 members. Seven will initially be appointed by AT&T, including the chair of the board, and six initially appointed by Discovery. CEO David Zaslav will have a seat.
  • "Discovery’s current multiple classes of shares will be consolidated to a single class with one vote per share," the company said in a statement. AT&T’s shareholders will receive stock representing 71% of the new company, and Discovery shareholders will own 29%.

The big picture: Monday's news confirms that the Time Warner acquisition wasn't enough to create a streaming service sizable enough to compete with the Netflix and Disney alone.

  • AT&T launched HBO Max a little less than a year ago. It has roughly 20 million subscribers. Discovery+ launched in January andhas roughly 15 million subscribers.
  • In a statement, the companies said the merger will create at least $3 billion in expected cost synergies annually for the new company. Money will be used to to increase its investment "in content and digital innovation, and to scale its global DTC business."
  • AT&T's market cap is $230 billion. Discovery's is $17 billion.

What they're saying: Zaslav said on a press call that he and AT&T CEO John Stankey have been secretly architecting this deal together "for the last few months" from his brownstone.

  • "We are here today because John and I and our boards are confident that Warner Media and Discovery are better together. We think together, combination makes us one of the best media companies in the world," Zaslav said.
  • "The new company will put storytelling, journalism and creative talent at the center of everything that we do," he continued. "This will be my No. 1 priority."

Between the lines: The deal will help AT&T pay down a massive amount of debt that it accrued from expensive deals over the years, including DirecTV and Time Warner.

  • In conjunction with the WarnerMedia spinoff, AT&T will receive $43 billion in a combination of cash, debt securities and WarnerMedia’s retention of certain debt.
  • AT&T will be getting out of content entirely, focusing more on mobility with plans to "more than double its current fiber footprint," Stankey said.

Be smart: Investors have been urging AT&T to do something more strategic with its media assets for months.

  • AT&T initially said it would use the assets to create a streaming behemoth. It's become clear over the past few months that the service hasn't grown big quickly enough to compete alone.
  • AT&T has been selling off assets to alleviate debt. It spun off its video assets into a joint venture this year. It also offloaded smaller assets, like its streaming service Crunchyroll and its wireless operations in Puerto Rico and the U.S. Virgin Islands. 
  • The new venture's business model will be focused on news, sports and lifestyle, with no plans to spin off CNN. Zaslav said they will combine CNN with Discovery's news assets in Europe. Executives would not answer questions on a press call about combining the companies' streaming services.

What's next: The transaction is expected to close mid-next year, subject to regulatory and board approvals. Zaslav said the new venture's name will be announced later this week or next week.

Go deeper

OnlyFans to prohibit "sexually explicit" content on platform

Photo: Jakub Porzycki/NurPhoto via Getty Images

OnlyFans, an online creator platform known for its adult content, announced Thursday that it will prohibit creators from posting "sexually explicit" content starting in October.

Why it matters: The company, which has been struggling to find outside investors, said it made the decision at the request of its banking and payout partners, though it is unclear how it will decide what content is sexually explicit.

15 mins ago - World

Biden will move U.S. troops to Eastern Europe "in the near term"

President Biden boards Air Force One at Joint Base Andrews on Jan. 28. Photo: SAUL LOEB/AFP via Getty Images

President Biden said on Friday he plans to move U.S. troops to Eastern European and NATO countries “in the near term.”

Driving the news: “Not too many” U.S. troops, Biden added in remarks to reporters at Joint Base Andrew upon returning from a trip to Pennsylvania. 

Updated 40 mins ago - Energy & Environment

Bomb cyclone prompts blizzard warnings from Virginia to Maine

Computer model projection showing the intense storm off of Cape Cod on Jan 29, 2022, with heavy snow and strong winds lashing the coastline. (Weatherbell.com)

Blizzard warnings are in effect for 11 million people from coastal Virginia to eastern Maine as a potentially historic winter storm is set to slam the Mid-Atlantic and Northeast beginning Friday.

Why it matters: The storm will bring hazards ranging from zero visibility amid hurricane force wind gusts and heavy snow, to coastal flooding that will erode vulnerable beaches and threaten property from the Jersey shore to coastal Massachusetts.