The Warner Bros. Thread | Will NOT merge with Paramount...capitalism is still terrible

[HouseOfTheSun]

1 minute ago, WittyUsername said:

After only three years? Damn. What does that mean for HBO Max? That was AT&T’s idea. 

Some sort of reorganizing with Discovery’s assets. No clue what a reshaped HBO Max will look like 

[Jamiem]

 

This video explains much of what is happening and could happen. 

 

- trying to compete with the scale of Netflix and Disney

- likely deal done this week (if its happens)

- could still be called off at any time

- Nothing finalised with how the transaction is going to occur

- AT&T media acquisitions took place with really bad timing

[lorddemaxus]

This is probably best for everyone. AT&T would've run the company into the ground in a couple years time. The guys running that company seem like absolute idiots. The fact that they're selling it off so soon is really funny tho.

[Eric Duncan]

Wait I thought AT&T and Discovery were merging and WB was just getting thrown to the wolves. So is it like a case where AT&T is giving WarnerMedia to Discovery?

[Jamiem]

5 minutes ago, Eric the Jigsaw Killer said:

Wait I thought AT&T and Discovery were merging and WB was just getting thrown to the wolves. So is it like a case where AT&T is giving WarnerMedia to Discovery?

process will be something like this:

 

AT&T will spinoff Warner like they did with Direct TV.

 

It will then get merged with Discovery, with AT&T owning likely 2/3 to 3/4 of the shares of the new company and Discovery owning 1/3 to 1/4 of the shares of the new merged company. 

[TestPattern]

This failed merger may replace AOL-Time Warner off the curriculum for every MBA program as a showcase as to how not to do vertical integration.

[Jamiem]

It's offical 

 

Dallas, TX and New York, NY – May 17, 2021. AT&T Inc. (NYSE:T) and Discovery, Inc. (NASDAQ: DISCA, DISCB, DISCK) today announced a definitive agreement to combine WarnerMedia’s premium entertainment, sports and news assets with Discovery’s leading nonfiction and international entertainment and sports businesses to create a premier, standalone global entertainment company. 

Under the terms of the agreement, which is structured as an all-stock, Reverse Morris Trust transaction, AT&T would receive $43 billion (subject to adjustment) in a combination of cash, debt securities, and WarnerMedia’s retention of certain debt, and AT&T’s shareholders would receive stock representing 71% of the new company; Discovery shareholders would own 29% of the new company. The Boards of Directors of both AT&T and Discovery have approved the transaction. 

The companies expect the transaction will create substantial value for AT&T and Discovery shareholders by: 

 

•

Bringing together the strongest leadership teams, content creators, and high-quality series and film libraries in the media business.

 

•

Accelerating both companies’ plans for leading direct-to-consumer (DTC) streaming services for global consumers.

 

•

Uniting complementary and diverse content strengths with broad appeal — WarnerMedia’s robust studios and portfolio of iconic scripted entertainment, animation, news and sports with Discovery’s global leadership in unscripted and international entertainment and sports.

 

•

Forming a new company that will have significant scale and investment resources with projected 2023 Revenue of approximately $52 billion, adjusted EBITDA of approximately $14 billion, and an industry leading Free Cash Flow conversion rate of approximately 60%.

 

---

•

Creating at least $3 billion in expected cost synergies annually for the new company to increase its investment in content and digital innovation, and to scale its global DTC business.

For AT&T and its shareholders, this transaction provides an opportunity to unlock value in its media assets and to better position the media business to take advantage of the attractive DTC trends in the industry. Additionally, the transaction allows the company to better capitalize on the longer-term demand for connectivity: 

 

•

AT&T shareholders participate in a leading media company with a broad global portfolio of brands, tremendous DTC potential and strengthened combined assets.

 

•

Creates substantial value opportunity for AT&T shareholders through stepped-up investment in growth areas – mobile and fixed broadband.

 

•

Capital structure improvement after closing will position AT&T as one of the best capitalized 5G and fiber broadband companies in the United States.

 

•

Results in two independent companies – one broadband connectivity and the other media – to sharpen the investment focus and attract the best investor base for each company.

A Stronger Competitor in Global Streaming 

The new company will compete globally in the fast-growing direct-to-consumer business — bringing compelling content to DTC subscribers across its portfolio, including HBO Max and the recently launched discovery+. The transaction will combine WarnerMedia’s storied content library of popular and valuable IP with Discovery’s global footprint, trove of local-language content and deep regional expertise across more than 200 countries and territories. The new company will be able to invest in more original content for its streaming services, enhance the programming options across its global linear pay TV and broadcast channels, and offer more innovative video experiences and consumer choices. 

Uniting Dynamic, Enduring and Historic Brands and Franchises 

The “pure play” content company will own one of the deepest libraries in the world with nearly 200,000 hours of iconic programming and will bring together over 100 of the most cherished, popular and trusted brands in the world under one global portfolio, including: HBO, Warner Bros., Discovery, DC Comics, CNN, Cartoon Network, HGTV, Food Network, the Turner Networks, TNT, TBS, Eurosport, Magnolia, TLC, Animal Planet, ID and many more. 

The new company will be able to increase investment and capabilities in original content and programming; create more opportunity for under-represented storytellers and independent creators; serve customers with innovative video experiences and points of engagement; and propel more investment in high-quality, family-friendly nonfiction content. 

 

---

Leadership, Governance and Structure 

The companies announced that Discovery President and CEO David Zaslav will lead the proposed new company with a best-in-class management team and top operational and creative leadership from both companies. 

Discovery’s current multiple classes of shares will be consolidated to a single class with one vote per share. 

The new company’s Board of Directors will consist of 13 members, 7 initially appointed by AT&T, including the chairperson of the board; Discovery will initially appoint 6 members, including CEO David Zaslav. 

Executive Commentary 

John Stankey Said: 

“This agreement unites two entertainment leaders with complementary content strengths and positions the new company to be one of the leading global direct-to-consumer streaming platforms. It will support the fantastic growth and international launch of HBO Max with Discovery’s global footprint and create efficiencies which can be re-invested in producing more great content to give consumers what they want. For AT&T shareholders, this is an opportunity to unlock value and be one of the best capitalized broadband companies, focused on investing in 5G and fiber to meet substantial, long-term demand for connectivity. AT&T shareholders will retain their stake in our leading communications company that comes with an attractive dividend. Plus, they will get a stake in the new company, a global media leader that can build one of the top streaming platforms in the world.” 

David Zaslav Said: 

“During my many conversations with John, we always come back to the same simple and powerful strategic principle: these assets are better and more valuable together. It is super exciting to combine such historic brands, world class journalism and iconic franchises under one roof and unlock so much value and opportunity. With a library of cherished IP, dynamite management teams and global expertise in every market in the world, we believe everyone wins...consumers with more diverse choices, talent and storytellers with more resources and compelling pathways to larger audiences, and shareholders with a globally scaled growth company committed to a strong balance sheet that is better positioned to compete with the world’s largest streamers. We will build a new chapter together with the creative and talented WarnerMedia team and these incredible assets built on a nearly 100-year legacy of the most wonderful storytelling in the world. That will be our singular mission: to focus on telling the most amazing stories and have a ton of fun doing it.” 

 

---

Transaction Highlights 

The combination will be executed through a Reverse Morris Trust, under which WarnerMedia will be spun or split off to AT&T’s shareholders via dividend or through an exchange offer or a combination of both and simultaneously combined with Discovery. The transaction is expected to be tax-free to AT&T and AT&T’s shareholders. 

In connection with the spin-off or split-off of WarnerMedia, AT&T will receive $43 billion (subject to adjustment) in a combination of cash, debt securities and WarnerMedia’s retention of certain debt. The new company expects to maintain investment grade rating and utilize the significant cash flow of the combined company to rapidly de-lever to approximately 3.0x within 24 months, and to target a new, longer term gross leverage target of 2.5x-3.0x.WarnerMedia has secured fully committed financing from JPMorgan Chase Bank, N.A. and affiliates of Goldman Sachs & Co. LLC for the purposes of funding the distribution. 

The transaction is anticipated to close in mid-2022, subject to approval by Discovery shareholders and customary closing conditions, including receipt of regulatory approvals. No vote is required by AT&T shareholders. Agreements are in place with Dr. John Malone and Advance to vote in favor of the transaction. 

 

source:https://www.sec.gov/Archives/edgar/data/0000732717/000119312521162721/d176202dex991.htm

[lorddemaxus]

No mention of Jason Kilar at all here. Does that mean he's getting kicked out?

[Jamiem]

3 minutes ago, lorddemaxus said:

No mention of Jason Kilar at all here. Does that mean he's getting kicked out?

They are looking at a roughly year long process until this deal closes and this is more of a look at how it benefits both companies so wouldn't read too much into just yet. Both companies had CEOs and CFOs present this announcement and it more outlined basic strategy, he could very well get axed or leave but I would guess that would come closer to the deal closing or just after it closes if that is going to happen (I'm leaning towards him staying and being head of DTC), they need someone to led things in the interim while everything gets sorted. 

[Gavin Feng]

1 hour ago, lorddemaxus said:

No mention of Jason Kilar at all here. Does that mean he's getting kicked out?

from thr:

 

Discovery CEO David Zaslav will lead the merged company as CEO, and there is no word about a role for WarnerMedia CEO Jason Kilar. The companies say the deal will close in 2022, subject to shareholder and regulatory approvals.

[Ryan Reynolds]

 

[Eric Duncan]

There’s so much passion aggression here it’s amazing lol

[cax16]

The less stankey has his hand in something the better it is imo. I think this will work out better for WM in the end. This new ceo will have about a year to see what’s working and what’s not before the deal closes. 

Edited May 17, 2021 by cax16

[TestPattern]

2 hours ago, Jamiem said:

It's offical 

 

Dallas, TX and New York, NY – May 17, 2021. AT&T Inc. (NYSE:T) and Discovery, Inc. (NASDAQ: DISCA, DISCB, DISCK) today announced a definitive agreement to combine WarnerMedia’s premium entertainment, sports and news assets with Discovery’s leading nonfiction and international entertainment and sports businesses to create a premier, standalone global entertainment company. 

Under the terms of the agreement, which is structured as an all-stock, Reverse Morris Trust transaction, AT&T would receive $43 billion (subject to adjustment) in a combination of cash, debt securities, and WarnerMedia’s retention of certain debt, and AT&T’s shareholders would receive stock representing 71% of the new company; Discovery shareholders would own 29% of the new company. The Boards of Directors of both AT&T and Discovery have approved the transaction. 

The companies expect the transaction will create substantial value for AT&T and Discovery shareholders by: 

 

•

Bringing together the strongest leadership teams, content creators, and high-quality series and film libraries in the media business.

 

•

Accelerating both companies’ plans for leading direct-to-consumer (DTC) streaming services for global consumers.

 

•

Uniting complementary and diverse content strengths with broad appeal — WarnerMedia’s robust studios and portfolio of iconic scripted entertainment, animation, news and sports with Discovery’s global leadership in unscripted and international entertainment and sports.

 

•

Forming a new company that will have significant scale and investment resources with projected 2023 Revenue of approximately $52 billion, adjusted EBITDA of approximately $14 billion, and an industry leading Free Cash Flow conversion rate of approximately 60%.

 

---

•

Creating at least $3 billion in expected cost synergies annually for the new company to increase its investment in content and digital innovation, and to scale its global DTC business.

For AT&T and its shareholders, this transaction provides an opportunity to unlock value in its media assets and to better position the media business to take advantage of the attractive DTC trends in the industry. Additionally, the transaction allows the company to better capitalize on the longer-term demand for connectivity: 

 

•

AT&T shareholders participate in a leading media company with a broad global portfolio of brands, tremendous DTC potential and strengthened combined assets.

 

•

Creates substantial value opportunity for AT&T shareholders through stepped-up investment in growth areas – mobile and fixed broadband.

 

•

Capital structure improvement after closing will position AT&T as one of the best capitalized 5G and fiber broadband companies in the United States.

 

•

Results in two independent companies – one broadband connectivity and the other media – to sharpen the investment focus and attract the best investor base for each company.

A Stronger Competitor in Global Streaming 

The new company will compete globally in the fast-growing direct-to-consumer business — bringing compelling content to DTC subscribers across its portfolio, including HBO Max and the recently launched discovery+. The transaction will combine WarnerMedia’s storied content library of popular and valuable IP with Discovery’s global footprint, trove of local-language content and deep regional expertise across more than 200 countries and territories. The new company will be able to invest in more original content for its streaming services, enhance the programming options across its global linear pay TV and broadcast channels, and offer more innovative video experiences and consumer choices. 

Uniting Dynamic, Enduring and Historic Brands and Franchises 

The “pure play” content company will own one of the deepest libraries in the world with nearly 200,000 hours of iconic programming and will bring together over 100 of the most cherished, popular and trusted brands in the world under one global portfolio, including: HBO, Warner Bros., Discovery, DC Comics, CNN, Cartoon Network, HGTV, Food Network, the Turner Networks, TNT, TBS, Eurosport, Magnolia, TLC, Animal Planet, ID and many more. 

The new company will be able to increase investment and capabilities in original content and programming; create more opportunity for under-represented storytellers and independent creators; serve customers with innovative video experiences and points of engagement; and propel more investment in high-quality, family-friendly nonfiction content. 

 

---

Leadership, Governance and Structure 

The companies announced that Discovery President and CEO David Zaslav will lead the proposed new company with a best-in-class management team and top operational and creative leadership from both companies. 

Discovery’s current multiple classes of shares will be consolidated to a single class with one vote per share. 

The new company’s Board of Directors will consist of 13 members, 7 initially appointed by AT&T, including the chairperson of the board; Discovery will initially appoint 6 members, including CEO David Zaslav. 

Executive Commentary 

John Stankey Said: 

“This agreement unites two entertainment leaders with complementary content strengths and positions the new company to be one of the leading global direct-to-consumer streaming platforms. It will support the fantastic growth and international launch of HBO Max with Discovery’s global footprint and create efficiencies which can be re-invested in producing more great content to give consumers what they want. For AT&T shareholders, this is an opportunity to unlock value and be one of the best capitalized broadband companies, focused on investing in 5G and fiber to meet substantial, long-term demand for connectivity. AT&T shareholders will retain their stake in our leading communications company that comes with an attractive dividend. Plus, they will get a stake in the new company, a global media leader that can build one of the top streaming platforms in the world.” 

David Zaslav Said: 

“During my many conversations with John, we always come back to the same simple and powerful strategic principle: these assets are better and more valuable together. It is super exciting to combine such historic brands, world class journalism and iconic franchises under one roof and unlock so much value and opportunity. With a library of cherished IP, dynamite management teams and global expertise in every market in the world, we believe everyone wins...consumers with more diverse choices, talent and storytellers with more resources and compelling pathways to larger audiences, and shareholders with a globally scaled growth company committed to a strong balance sheet that is better positioned to compete with the world’s largest streamers. We will build a new chapter together with the creative and talented WarnerMedia team and these incredible assets built on a nearly 100-year legacy of the most wonderful storytelling in the world. That will be our singular mission: to focus on telling the most amazing stories and have a ton of fun doing it.” 

 

---

Transaction Highlights 

The combination will be executed through a Reverse Morris Trust, under which WarnerMedia will be spun or split off to AT&T’s shareholders via dividend or through an exchange offer or a combination of both and simultaneously combined with Discovery. The transaction is expected to be tax-free to AT&T and AT&T’s shareholders. 

In connection with the spin-off or split-off of WarnerMedia, AT&T will receive $43 billion (subject to adjustment) in a combination of cash, debt securities and WarnerMedia’s retention of certain debt. The new company expects to maintain investment grade rating and utilize the significant cash flow of the combined company to rapidly de-lever to approximately 3.0x within 24 months, and to target a new, longer term gross leverage target of 2.5x-3.0x.WarnerMedia has secured fully committed financing from JPMorgan Chase Bank, N.A. and affiliates of Goldman Sachs & Co. LLC for the purposes of funding the distribution. 

The transaction is anticipated to close in mid-2022, subject to approval by Discovery shareholders and customary closing conditions, including receipt of regulatory approvals. No vote is required by AT&T shareholders. Agreements are in place with Dr. John Malone and Advance to vote in favor of the transaction. 

 

source:https://www.sec.gov/Archives/edgar/data/0000732717/000119312521162721/d176202dex991.htm

I'm currently an AT&T shareholder, so cool for me.

[lorddemaxus]

1 hour ago, Ryan Reynolds said:

 

Stop posting shit from this grifter lmao. It's not even up to Universal to acquire another company.

[Eric Duncan]

 

[Madhuvan]

It's really amazing how reaction to this is totally complete to that of Fox and Disney. Come to think of it , this is actually inching towards monopoly.

 

[Fullbuster]

2 hours ago, Ryan Reynolds said:

 

 

Hard to imagine this passing antitrust authorities, it would be bigger than Disney buying Fox...Warner + Discovery + Universal seems too much.

I believe Universal is more likely to go with ViacomCBS, combining peacock and Paramount+, it'd be more likely to pass.

[WittyUsername]

I’m really tired of hearing about corporate mergers at this point. I remember back when Rupert Murdoch tried to buy Time Warner and everyone just laughed at him because they knew it wouldn’t happen. I miss those days...

[Fullbuster]

 

 

More likely