AT&T and Discovery Reportedly Nearing a Deal to Merge Media Assets

AT&T is negotiating to combine its media assets with Discovery which would include AT&T-owned networks (HBO, CNN, TNT, TBS, and more), Warner Bro. studio, and Discovery’s channels (HGTV, Food Network, TLC, Discovery, etc.) Bloomberg reported Sunday that sources say the deal could be announced as early as this morning.

Combined, the two companies would be a stronger competitor against Netflix, Disney+, and other streaming services that have built large subscriber bases. AT&T has invested in HBO Max as a response to the rise of streaming and has found success in simultaneously releasing new titles in theaters and on the streaming app. HBO Max and HBO have 44.2 million subscribers combined. The streaming service is set to launch its ad-supported tier next month. Discovery recently launched Discovery+ and has focused on unscripted series to set itself apart from the competition. The company recently shared that it has reached 15 million subscribers across its streaming portfolio, led by Discovery+.  

AT&T has publicly struggled with pressure from investors to sell off assets and reduce debt. News of a potential combining of assets comes just three months after the company entered a deal that gave TPG significant minority stake in DirecTV. Earlier in the year, AT&T merged AT&T TV Now with AT&T TV in an effort to streamline its streaming services and before that, sold anime streaming service Crunchyroll to Sony.

“AT&T always had to figure out what to do with WarnerMedia,” said Brian Wieser, of New York advertising firm GroupM, quoted by the Los Angeles Times. “The company was not optimally positioned to maximize the value of WarnerMedia because it had all these other obligations.”

Both AT&T and Discovery are scheduled to pitch to advertisers this week. DIscovery’s upfront presentation is Tuesday, followed by WarnerMedia on Wednesday.