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AT&T and Discovery in talks for $150bn media merger

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The talks would see assets like HBO, Warner Bros and the Discovery channel come together in a new player in the streaming wars.

AT&T is in talks with Discovery Inc for a $150bn merger that would create a new streaming giant, according to media reports.

The deal, first reported by Bloomberg, would combine the two companies’ media assets. AT&T’s properties under the WarnerMedia umbrella include CNN, HBO and Warner Bros and several other TV stations while Discovery owns its eponymous TV station, Animal Planet and a slew of other networks.

The new entity would reportedly be separate to the other businesses of AT&T, which is the world’s largest telecoms company.

AT&T acquired Time Warner in 2018 for $81bn, a deal which placed the company in significant debt.

The merger, if completed, would create a massive new player in the streaming market and combine two portfolios of content, bringing together TV, movies and news.

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Streaming has become a fervent and highly competitive market with Netflix, Disney and Amazon all locking horns over new content and subscriber numbers.

However HBO Max, the Warner-led streaming service owned by AT&T, is a much smaller player in the streaming landscape when put up against Netflix’s 208m subscribers. Disney+ meanwhile has amassed just over 100m subscribers in less than a year and a half.

The race for higher subscription numbers could get tougher very soon. As seen in Netflix’s last investor call, subscriber growth slowed down significantly due to a mix of lockdown measures easing and its content schedule being disrupted by the pandemic.

These latest talks continue a trend of mega merger deals in media and entertainment assets in bids to amass the most content.

Disney acquired the media assets of 21st Century Fox in 2019, adding a hefty amount of content to what would become Disney+, and Viacom and CBS merged that same year.

Discovery itself is no stranger to mergers, forking over $14.6bn in 2018 for Scripps Networks Interactive.

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