Another media merger could be on the horizon. Deadline reports AT&T and Discovery have been discussing a possible merger of their entertainment entities. News of these talks was initially discovered by Bloomberg and The Financial Times. If the merger were to come to fruition, it would be worth up to $40 billion in revenue.
According to Deadline, the two companies had been nearing an alleged announcement this week with AT&T’s board meeting to vote upon the proposed deal today. The speculative talks could be just that, and not lead to an actual deal at this time. Discovery, which totes mostly unscripted content, operates networks such as HGTV, Food Network, TLC, and the Discovery Channel. AT&T’s entertainment arm is owned by WarnerMedia. They recently engulfed a large number of assets including HBO, Warner Bros., and all of the Turner-owned mediums such as CNN, TNT, and TBS.
The joint venture could bolster both entities’ catalog especially in this age of streaming according to Deadline. WarnerMedia’s streaming service HBO Max launched this time last year and has since secured 2.7 million subscribers. Combined with HBO’s linear programming, a total of 44.2M have subscribed as of the 1st quarter. Discovery just recently launched its own streaming platform entitled Discovery+. With both an ad and ad-free version, subscribers have access to content from such networks as the true-crime-focused Investigation Discovery and cable-network channel, OWN. The possibilities are plenty with that many networks under one umbrella, including better-priced bundle packages.
According to Deadline, there are a few potential setbacks from this possible merger. As far as cable goes, the combination would cause some friction among other networks. There would also be the issue of executive musical chairs as both AT&T and Discovery have attained new leaders to strategize the streaming terrain. WarnerMedia is led by former Hulu and Amazon executive Jason Kilar. Discovery has extended its reach under the tutelage of David Zaslav. If AT&T learned anything from its recent acquisition, it is that making room for everyone is a struggle.
While Deadline did not receive comment from either party about the said merger, the rumblings feel eerily timed. This week will be upfront presentations as networks vie for advertisers’ bids. Discovery is scheduled to present on Tuesday, and WarnerMedia will follow on Wednesday.