Hollywood was rocked once again recently as another major media merger, seemingly out of nowhere, was announced. AT&T has decided to spin off WarnerMedia in a merger with Discovery that will create a brand new media company. This will, effectively, take AT&T out of the media business, making them mostly a major telecom company once again. Meanwhile, the new company that comes of the WarnerMedia and Discovery merger is poised to become a powerhouse in the industry.
While it may not be as flashy, on the surface, as the Disney/Fox merger was a few years ago, the implications on the industry are no less severe. And that, ultimately, means that consumers who enjoy movies and TV shows, particularly in the streaming world, are in for some potentially big changes. While there is still much to be determined in the coming months, here is a breakdown of what the merger means.
WarnerMedia and Discover Will Become a New Company
Just a few years ago, AT&T merged with Time Warner, which formed WarnerMedia. This was viewed as the path forward in a rapidly changing media landscape. A massive telecom company owning and operating media companies, such as Warner Bros., to control both sides of the equation. Yet, AT&T, saddled with massive debt, has ditched the experiment just several years in. Now, Discovery is taking the opportunity to create a new Hollywood giant that can take on the likes of Netflix.
The $43 billion deal will see AT&T fold all of WarnerMedia's assets into Discover. While the new name of the company that will be formed has yet to be revealed, it is undoubtedly going to be a huge player in the streaming landscape. WarnerMedia controls HBO Max, one of the biggest streaming services in the game. Discovery, meanwhile, has Discovery+. It remains unclear if the services will be merged, or if they will stay independent, much like Disney did with Disney+ and Hulu. Either way, the new company will have tremendous resources to compete. To that end, Discovery CEO David Zaslav has talked about investing as much as $20 billion annually in content. That is a whole lot of movies and TV shows.
What Brands Will Be Included In This New Company?
Both WarnerMedia and Discovery have a lot of huge brands across a wide range of entertainment. When these companies merge, it means all of those brands will be under one roof. As such, there will be ample opportunity for franchise plays, big streaming deals and shake-ups for live sports, and even TV news. At this stage, it is not clear what the leadership at this new company will do. But it is probably helpful to get an understanding of what brands are in play here.
WarnerMedia includes HBO Max, Warner Bros., DC Comics and Adult Swim, for starters. They also have networks such as CNN, TNT, truTV, HLN, Cinemax, Turner Classic Movies and Cartoon Network. The company also has Rooster Teeth Crunchyroll under its vast umbrella. And that's only really scratching the surface, as each of those brands contains a ton of IP. Warner Bros., for example, controls the Harry Potter franchise. That's just one example.
Discover has an equally stacked deck. Its stable of networks includes HGTV, Food Network, TLC, OWN, Animal Planet, Travel Channel and Motor Trend, among others. They also have a sizable digital footprint with brands like NowThis, The Dodo, Food and Thrillist, just to name a few. Without speculating too much, it's easy to see that there is an awful lot on the table with this merger.
What Does This Mean for the DC Universe?
DC is one of the biggest brands WarnerMedia has at its disposal. The DCEU is rolling along with many new movies on the way, such as The Suicide Squad, Aquaman 2 and The Flash, among many others. We've also got movies like The Batman that exist in different universes entirely. Plus, shows like Peacemaker will expand the DC brand on HBO Max. DC has a lot to offer and, one could argue, there is some untapped potential there.
As for what this newly formed company will do? One can assume that there will be more to come from DC Films, in addition to TV projects. For now, there has been no specific indication. But if this is about streaming and dominance in Hollywood, rest assured that the new company will make use of DC and its stable of heroes. A change in leadership could mean a change in creative direction behind the scenes, that much is certain. But DC isn't going away any time soon. WarnerMedia CEO Jason Kilar is already said to be negotiating an exit from the company. So big changes are indeed coming.
What About Warner Bros. Interactive?
One of the most up-in-the-air elements of the deal so far is the fate of Warner Bros. Interactive. WarnerMedia's digital company is responsible for a lot of video games, with TT Games, Rocksteady Studios, NetherRealm Studios, Monolith Productions, WB Games Boston, Avalanche Software, and WB Games Montréal. The indication currently is that Warner Bros. Interactive will be split up as a result of the merger. This means the various studios housed within the company could be scattered and broken up. Until further details are provided it's hard to say what this will mean for the future. But the fates of many LEGO video games and franchises like Mortal Kombat could be at stake here.
More News and Sports Could Move to Streaming
Looking over the brands at stake in this merger, one thing is clear; both of these companies have a huge stake in the cable TV game. Specifically, there is a lot of news and a lot of sports on the line here. CNN, NBA and MLB, it's all in line for a big shake-up with the merger. The deal has a lot to do with streaming. Netflix and Disney+ are at the top of the hill. Everyone else wants a bigger piece of the pie. Moving things like popular cable news and major sporting events to streaming would be one way to get a lot of attention.
This is not to say that cable news networks or basketball games will exclusively go the streaming route over the next year or so. But just as Amazon Prime Video cut a massive deal for Thursday Night Football, don't be surprised to see similar moves being made in the future as this merger presses forward. Not to mention that Disney owns ESPN and has been pushing ESPN+ in a big way. A CNN streaming service would not be out of the question. Point being, this could go a long way toward cord-cutting, further advancing towards a streaming-dominated world.
How Soon Is the Merger Going to Happen?
Much like the Disney/Fox deal, or when AT&T merged with Time Warner, this will be a long process. It won't happen overnight. Currently, it's expected that the WarnerMedia and Discovery merger won't go into effect until some time in 2022. A deal of this size is subject to regulatory approval, and that is not an easy process. There is even a chance that regulating bodies will get in the way of this deal, which could throw a wrench in the gears. This to say, nothing is happening yet. But when/if the deal is given the go-ahead, expect big change This news originated at IGN.