Discovery, WarnerMedia Officially Complete $43 Billion Merger

Less than a year after Discovery and WarnerMedia announced their plans to merge, Warner Bros. Discovery has officially arrived. The companies crossed the finish line Friday afternoon and completed their $43 billion merger, combining the media assets of WarnerMedia and Discovery to create a new, streaming-centric media company that will once again reshape the media landscape. The deal gave AT&T—which had owned WarnerMedia, and has now exited the entertainment industry—$43 billion cash and debt securities, with WarnerMedia spun off and combined with Discovery. AT&T shareholders received stock representing 71% of Warner Bros. Discovery, and Discovery shareholders own 29% of the new company. The new company unites WarnerMedia—which includes Warner Bros., HBO, TNT, TBS, CNN, Cartoon Network and streamer HBO Max—with Discovery’s own portfolio, which includes Discovery, HGTV, TLC, ID, Food Network, OWN, Magnolia Network and Discovery+. “Today’s announcement marks an exciting milestone not just for Warner Bros. Discovery but for our shareholders, our distributors, our advertisers, our creative partners and, most importantly, consumers globally,” David Zaslav, Warner Bros. Discovery CEO, said in a statement. “With our collective assets and diversified business model, Warner Bros. Discovery offers the most differentiated and complete portfolio of content across film, television and streaming. We are confident that we can bring more choice to consumers around the globe while fostering creativity and creating value for shareholders. I can’t wait for both teams to come together to make Warner Bros. Discovery the best place for impactful storytelling.” Added AT&T CEO John Stankey in a statement, "In WarnerMedia, Discovery inherits a talented and innovative team and a dynamic growing and global company that is well positioned to lead the transformation that’s taking place across media and entertainment, direct-to-consumer distribution and technology. The combination of the two companies will strengthen WarnerMedia’s established and leading position in media and streaming. And our shareholders will now have a significant stake in Warner Bros. Discovery and its future successes. We look forward to seeing what the WBD team accomplishes with these industry-leading assets.” Warner Bros. Discovery's leadership team One day before the deal closed, Zaslav set his new Warner Bros. Discovery leadership team. JB Perrette, formerly president and CEO of Discovery Streaming and International, will lead all streaming efforts at the company as CEO and president of Warner Bros. Discovery Global Streaming and Interactive Entertainment. Jon Steinlauf Named Warner Bros. Discovery U.S. Ad Sales Chief Kathleen Finch, chief lifestyle brands officer at Discovery, will have oversight of more than 40 of the company’s U.S. networks as chairman and chief content officer, U.S. Networks Group. Excluded from her purview is HBO/HBO Max—which will continue to be run by chief content officer Casey Bloys, Adweek’s reigning TV Executive of the Year—and CNN, where Chris Licht was named CNN global chairman and CEO in February following Jeff Zucker’s exit earlier this year. Bruce Campbell was named chief revenue and strategy officer, with responsibility for U.S. advertising sales, distribution revenue and content licensing; global corporate development and strategy; global streaming platform agreements; and legal affairs. He previously was Discovery’s chief development, distribution and legal officer. David Leavy—Discovery’s chief corporate operating officer—will be chief corporate affairs officer. Channing Dungey will continue as chairman of Warner Bros. Television Group, and Toby Emmerich continues as chairman as Warner Bros. Pictures Group. Gerhard Zeiler is president of international, with responsibility for the company’s businesses across more than 200 countries and territories. It was the same role he held at WarnerMedia. As previously announced, Discovery CFO Gunnar Wiedenfels will continue with that same role in the company. Friday morning, the company named Jon Steinlauf as its chief U.S. advertising sales officer. Steinlauf, who held that same title for Discovery, received the top job over WarnerMedia ad sales chief JP Colaco, who will be leaving the company. Steinlauf now has just five weeks to prepare for the company’s combined upfront week presentation, will be expected to take the place of Discovery’s previously scheduled presentation on the morning of Tuesday, May 17; WarnerMedia's upfront had been set for one day later, on Wednesday morning. Earlier this week, several top WarnerMedia execs announced their departures ahead of the merger close, including CEO Jason Kilar; HBO Max evp and general manager Andy Forssell; WarnerMedia Studios and Networks Group chair and CEO Ann Sarnoff; and evp and chief revenue officer Tony Gonclaves. Zaslav has pledged to cut $3 billion in debt after completion of the merger, raising the likelihood of significant layoffs as the companies combine. Streaming uncertainty While the leadership structure has been determined, the fate of each company's major streamer—Discovery+ and HBO Max—remains unclear. Discovery+ debuted in January of last year, and the company reported 22 million global direct-to-consumer subscribers in the fourth quarter—which includes Discovery+ and other platforms. On the WarnerMedia front, HBO and HBO Max combined for 73.8 million subscribers globally at the end of the year, and HBO Max alone increased to 46.8 million, up 5.3 million for the full year. Wiedenfels confirmed last month that both platforms will ultimately be consolidated into a single service, but offered no details about when and how that might occur. The company will offer both ad-free and ad-lite products for the combined streamer, and will first offer the services as a bundle while it figures out how to combine the two platforms. Discovery+ and HBO Max Will Combine Into One Streamer Following Pending Merger As Warner Bros. Discovery figures out how to combine the two platforms, it will first bundle the two streamers. WarnerMedia also launched CNN+ last month. CNN has plans to eventually offer a lower priced version of CNN+ that will be ad-supported—and it will also be available with HBO Max, but no word on how Discovery+ factors into those plans. Discovery shareholders voted last month to approve the WarnerMedia merger, which cleared the last major hurdle standing in the way of the union. WarnerMedia parent company AT&T did not need shareholder approval for the merger, which received U.S. antitrust clearance in February. The deal is the first major media merger since Viacom and CBS recombined in December 2019. That had capped off a wild two-year period that also saw AT&T buy Time Warner ($85 billion), Discovery acquire Scripps Networks Interactive ($14.6 billion), Disney snap up Fox ($71.3 billion), and Comcast picking up the remaining 61% stake in Sky ($39 billion).