The Warner Bros. Discovery Deal Has Closed

Last Friday, Discovery and AT&T announced that their merger was made official. With the deal, AT&T received $40.4 billion in cash, and two media powerhouses were combined.

“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,” said David Zaslav, Warner Bros. Discovery chief executive officer. “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.”

Now that the deal is done, the new company has plans to combine Discovery+ and HBO Max. However, for now, the two will remain separate and will be offered in a bundle deal. Discovery+ is currently priced at $4.99 per month with ads or $6.99 without ads. The service primarily focuses on nonfiction programming. HBO Max currently costs $9.99 per month with ads or $14.99 a month without ads. HBO’s service features HBO content, originals, movies, and more. As of now, CNN+ has not been mentioned in talks of bundling Warner Bros. Discovery services.

“We are at the dawn of a new age of connectivity, and today marks the beginning of a new era for AT&T,” said John Stankey, AT&T chief executive officer, in an announcement about the merger closing. “With the close of this transaction, we expect to invest at record levels in our growth areas of 5G and fiber, where we have strong momentum, while we work to become America’s best broadband company. At the same time, we’ll sharpen our focus on returns to shareholders. We expect to invest for growth, strengthen our balance sheet and reduce our debt, all while continuing to pay an attractive dividend that puts us among the top dividend paying stocks in America.

“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.”

Axios estimates that the value of the new company is around $130 billion. When looking at the estimated market cap of $45.60 billion for Warner Bros. Discovery, according to a report from Indie Wire, the company is the third largest media giant, following Disney and Netflix at $240 billion and $161 billion respectively.

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