Verizon recently sold off its rather ill-fitting media business, which included AOL and Yahoo, to a giant Las Vegas resort owner. Now one of its biggest rivals in the telecom market is doing something similar though with a slightly different spin. AT&T is now reportedly in talks to spin off its rather large media business in a deal that could see Harry Potter and Batman on the same large ship as the Discovery Channel and Food Network.
After nearly two years of arguing with regulators, AT&T was finally cleared to acquire the gigantic Time Warner in 2018. Three years later, it is now tipped to be spinning it off to combine it with another large TV and cable company, Discovery. Both are currently struggling in an increasingly streaming-centric world, despite both having some of the world’s largest franchises and properties under them.
WarnerMedia is home to HBO, CNN, TNT, TBS, and, of course, Warner Bros., the latter of which has so many shows and films under its name. On the other hand, Discovery mostly owns nonfiction programs and channels like Discovery, HGTV, Food Network, and Animal Planet. If combined, the new empire would cover both sides of the TV and cable entertainment coin and could indeed become a threat to the dominance of Netflix and the new Disney+.
The deal is expected to be made on Monday and, if true, would represent a complete about-face from the network operator that has been investing heavily in this media business and its own HBO Max streaming service for the past years. Behind the scenes, however, AT&T has accrued heavy debts for the $81 billion purchase of Time Warner.
Of course, the deal could still fall through and would be subject to even more scrutiny from regulators than AT&T’s initial acquisition was. The move is pretty much also an indirect admission by AT&T and Discovery, both of whom have their own streaming services, that they are struggling against today’s cord-cutting generation and streaming giants. Whether or not their combined properties will be enough to sway subscribers in their direction, however, remains to be seen, presuming the merger is even approved in the first place.