Technology

AT&T close to deal to combine media empire with Discovery - reports

The proposed deal could create an entertainment giant to better compete with Netflix and Disney Plus

Photo: REUTERS/Brendan McDermid
  • AT&T is already home to some popular brands in the entertainment business like HBO, HBO Max, CNN;
  • HBO and HBO Max now have 63.9 million global subscribers, compared with over 100 million for Disney Plus and 207.6 million for Netflix.

U.S. telecoms giant AT&T Inc is nearing a deal to combine its media assets, including CNN and HBO, with Discovery Inc, the owner of lifestyle TV networks such as HGTV and TLC, according to news reports citing unnamed sources.

The deal would mark the unwinding of AT&T’s $108.7 billion acquisition of U.S. media conglomerate Time Warner in 2018, and it would underscore its recognition that TV viewership has moved to streaming, where scale is required to take on the likes of Netflix and Disney Plus.

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The combination would create a new company separate from AT&T that could be valued at $150 billion, including debt, the Financial Times reported. Discovery currently has a market value including debt of about $30 billion.

A deal could be announced later this week, according to Bloomberg News, which first reported the news.

Spokespeople for AT&T and Discovery declined to comment.

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The proposed deal would put together one of Hollywood’s most powerful studios, home to the Harry Potter and Batman franchises, with Discovery’s stable of unscripted home, cooking and nature and science shows.

With the acquisition of Time Warner, AT&T sought to create a media and telecoms powerhouse combining content and distribution. Yet this proved a costly strategy as it simultaneously sought to expand next generation wireless services, most recently borrowing $14 billion to buy more wireless spectrum.

AT&T has been seeking to unwind its debt-laden acquisitions and lighten its balance sheet. In February, it agreed to sell a third of satellite TV service DirecTV, which it purchased in 2015 for about $68 billion, to TPG Capital in a deal valuing the business at $16.25 billion.

AT&T is already home to some popular brands in the entertainment business like HBO, HBO Max (set to be launched in June in Latin America), CNN and many more through its WarnerMedia division.

HBO and HBO Max now have 63.9 million global subscribers, compared with over 100 million for Disney Plus and 207.6 million for Netflix.

READ ALSO: With superheroes and sci-fi, Disney+ outlook bright

Discovery, whose portfolio includes Animal Planet and the Discovery Channel, reaches 88.3 million homes in the United States. Its streaming service Discovery+ which launched in January in the U.S. has 15 million subscribers.

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