AT&T Selling WarnerMedia to Discovery – AEW’s TV Home Being Sold

AT&T and Discovery Inc. announced a deal Monday in which AT&T’s WarnerMedia — which includes CNN HBO, TNT and TBS — will be spun off and combined with Discovery in a new standalone media company, CNN reports.

The spinoff — less than three years after AT&T acquired Time Warner Inc. for $85.4 billion — results from a $43 billion deal with Discovery, the owner of lifestyle networks including the Food Network and HGTV.

Faced with cord-cutting and incursions by streaming services, major broadcast media companies have retrenched and sought strength through mergers.

“With a library of cherished IP, dynamite management teams and global expertise in every market in the world, we believe everyone wins,” Discovery President and CEO David Zaslav said in a press release.

AT&T will receive $43 billion in a combination of cash, debt securities, and WarnerMedia’s retention of certain debt. AT&T shareholders will receive stock representing 71% of the new company and Discovery stockholders will own 29% of the new company.

AT&T had pushed into the streaming sector through HBO Max, a direct competitor with Netflix, Apple, Disney and Comcast. Discovery launched a standalone streaming service called Discovery Plus this year.

The deal to give up its media business marks a major shift by AT&T, which fought hard to buy Time Warner in the face of Justice Department efforts to block the deal on anti-competitive reasons.

The deal is expected to close by the middle of next year.