AT&T to spin-off entertainment assets to Discovery in new potential deal

[Holt]

https://www.vox.com/platform/amp/rec...netflix-merger

This comes after they've already sold off a few other subsidiaries to try and reduce their debt.

[Revolutionary_Jack]

https://www.vox.com/platform/amp/rec...netflix-merger

This comes after they've already sold off a few other subsidiaries to try and reduce their debt.

"Won't someone rid me of this turbulent corporation?"

[Castle]

"Won't someone rid me of this turbulent corporation?"

That would be nice but I will settle for a half way compromise if they at least keep some pure creative edge when it concerns their movies and television subsidiaries.

[Noodle]

I wonder how this will effect HBOMax, since Discovery has their own streaming service.

[thwhtGuardian]

That would be nice but I will settle for a half way compromise if they at least keep some pure creative edge when it concerns their movies and television subsidiaries.

It looks like they're selling it all so they won't have any media subsidiaries.

[DrNewGod]

I wonder how this will effect HBOMax, since Discovery has their own streaming service.

I've wondered the same. Might they plan to approach it like Disney+, offering either piecemeal or bundled packages?

[Immortal Weapon]

WB video game division is getting split because of this deal.

https://mobile.twitter.com/stephento...28369601384450

[Brian B]

It’s crazy how quickly the AT&T-Warner deal is being unwound. I mean, this was $100 billion in borrowed cash, and now they’re just... ending it? What. The. Heck? Crazy.

Is Discovery+ really a good fit? Which is worth more on paper? Discovery+ or the Warner properties excluding AT&T’s phone businesses?

Poor DC. Being a small subsidiary, you know this is just going to be more crazy for DC.

[Username taken]

That's the thing about mergers, a lot of things need to fall into place to make them work.

The state of the books need to be reasonable, plans put in place for non-performing assets, corporate culture synergization etc.

A number of mergers tend to get unwound like this...particularly when the bigger partner in the merger doesn't have any exit or work out strategy for said non-performing assets/subsidiaries.

[titanfan]

Lol I bought "T" stock just because I was happy with DC/HBO Max (and they have a good safe dividend).

But they seemed to realize it wasn't a good fit and they were screwing it up more than anything.

[luprki]

This was done to create a streaming giant to complete with Disney+, Netflix, Amazon Prime and Apple. 77% of the new company will still be own by AT&T shareholders.

I wonder what will happen with Directv?

[SUPERECWFAN1]

This was done to create a streaming giant to complete with Disney+, Netflix, Amazon Prime and Apple. 77% of the new company will still be own by AT&T shareholders.

I wonder what will happen with Directv?

Its been said that for years AT&T have wanted rid of Direct TV. That once the Sunday Ticket ends , they were gonna cut their losses from it. So they likely will be happy another company is running that.

[Comic-Reader Lad]

As in the DC thread, there seems to be the misconception that Discovery is acquiring/buying WarnerMedia (and therefore, DC). This is not the case. The assets of WarnerMedia and Discovery, Inc. are being merged and this new, combined company will be spun off from AT&T.

However, it is true that the new company will be run by a head honcho from Discovery. That seems to be good news among those in the know as the Discovery guy is more respected in Hollywood than Jason Kilar, the guy who was running WarnerMedia and who pushed through the day-and-date release of movies to both theaters and HBO Max.

Here's some info on CORPORATE SPINOFFS (a type of Divestiture) from Investopedia:

https://www.investopedia.com/terms/s/spinoff.asp

Why Would a Company Initiate a Spinoff?
The main reason for a spinoff is that the parent company expects that it will be lucrative to do so. Spinoffs tend to increase returns for shareholders because the newly independent companies can better focus on their specific products or services. A company may conduct a spinoff to focus its resources and better manage the division that has more long-term potential, or if a portion of the business is headed in a different direction and has different strategic priorities from the parent company, or if it has been looking for a buyer to acquire that segment of its business but failed to find one.

How Is a Spinoff Done?
A corporation creates a spinoff by distributing 100% of its ownership interest in that business unit as a stock dividend to existing shareholders. It can also offer its existing shareholders a discount to exchange their shares in the parent company for shares of the spinoff. For example, an investor could exchange $100 of the parent’s stock for $110 of the spinoff’s stock. The spin off will have a separate management structure and a new name, but it will retain the same assets, intellectual property, and human resources. The parent company will continue to provide financial and technological support in most cases.

What Are the Disadvantages of a Spinoff?
The downside of a spinoff is that its share price can be more volatile and can tend to underperform in weak markets and outperform in strong markets. Spinoffs can also experience high selling activity; shareholders of the parent may not want the shares of the spinoff they received because it may not fit their investment criteria. The share price may dip in the short term because of this selling activity, even if the spinoff’s long-term prospects are positive.

[luprki]

AT&T shareholders will still own more than 2/3 of the new company.
Does this mean AT&T is still the parent company?

[Angilasman]

Corporate mergers are bad - but this strikes me as better than the alternative. AT&T has been a terrible fit: these phone company folks don't seem to know squat about making movies and TV shows. So many talented people fired, so many great projects shut down or let to rot because AT&T didn't care about things that worked/had a legacy/had a devoted fanbase - because they were convinced they could pull something more profitable out of their butts later!

At least Discovery is showbiz people.