Mergers between entertainment companies seem to happen pretty regularly these days, and now we have the news of a new acquisition that will affect many streaming customers. In a press release on March 11, Discovery, Inc. announced that the shareholders for Discovery Inc. had approved proposals to acquire WarnerMedia.
The following company will be called Warner Brothers Discovery, and it will combine the holdings of both companies. Discovery is already home to such networks is the Food Network and the Discovery Channel, while WarnerMedia is the parent company for Warner Brothers, DC, DC Comics, and HBO, as well as TBS and TNT and many other properties. This will also give Discovery Inc. ownership of HBO Max.
The cost to acquire WarnerMedia from AT&T was reportedly $43 billion.
The press release taken directly from Discovery’s corporate website reads as follows:
New York, NY – March 11, 2022 Discovery, Inc. (NASDAQ: DISCA, DISCB, DISCK) today announced that the Company’s stockholders have approved various matters relating to the acquisition of WarnerMedia from AT&T to create Warner Bros. Discovery, Inc., a premier, global entertainment company. The transaction will bring together WarnerMedia’s premium entertainment, sports and news assets with Discovery’s leading nonfiction and international entertainment and sports businesses. At the Special Meeting of Discovery Stockholders held earlier today, based on estimated preliminary voting results, Discovery stockholders voted to approve the charter amendment proposals, share issuance proposal and the advisory (non-binding) compensation proposal. The approvals mark the completion of one of the few remaining closing conditions for the merger. These preliminary voting results will be updated through the filing of a Current Report on Form 8-K to reflect the final certification of results from the Inspector of Election. The acquisition is expected to close early in the second quarter of 2022, subject to other customary closing conditions. The Boards of Directors of both AT&T and Discovery have approved the transaction.
How Will This Impact HBO Max?
As this article was being prepared, news broke about the impact of the acquisition of WarnerMedia on the two streaming services of Discovery+ and HBO Max. MovieWeb had been prepared to lay out various scenarios on how the two streaming services would coexist. However, now we have confirmation on what Discovery Inc. is planning on doing with the two streaming services.
Discovery CFO Gunnar Wiedenfels, who will also serve as the CFO officer of the combined Warner Bros Discovery, relayed the plan for the two streaming services during the Deutsche Bank 30th Annual Media, Internet & Telecom Conference.
“One of the most important items here is that we believe in a combined product as opposed to a bundle… We believe that the breadth and depth of this content offering is going to be a phenomenal consumer value proposition. The question is, in order to get to that point and do it in a way that’s actually a great user experience for our subscribers, that’s going to take some time. Again, that’s nothing that’s going to happen in weeks — hopefully not in years, but in several months — and we will start working on an interim solution in the meantime. So right out of the gate, we’re working on getting the bundling approach ready, maybe a single sign-on, maybe ingesting content into the other product, etc., so that we can start to get some benefits early on. But the main thrust is going to be harmonizing the technology platform. Building one very, very strong combined direct-to-consumer product and platform, that’s going to take a while.”
Although no time frame has been specified for combining the two services, the fact that the services will be combined rather than remaining two separate entities means that customers will end up only having one subscription in the end. This will serve to save customers money as well as enhance their streaming offerings. More information on the combination of the two streaming services will obviously be coming in the future.
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