On May 17, 2021, AT&T announced that it had reached an agreement to merge its content and broadcasting subsidiary, WarnerMedia (the former Time Warner, which AT&T had acquired in 2018 for just over $85 billion in an attempt to become a vertically integrated media conglomerate) with Discovery Inc. to form a new company, subject to regulatory approval. The merger, scheduled to be completed in mid-2022, would be structured as a Reverse Morris Trust; AT&T shareholders will hold a 71% interest in the new company's stock and appoint seven board members, and Discovery shareholders will hold 29% and appoint six board members. AT&T will receive $43 billion in cash and debt from the spin-off.[96][97]
Zaslav will lead the new company. He stated that the new company's goal would be to "[tell] the most amazing stories and have a ton of fun doing it", and emphasized that the two companies spend over $20 billion annually on content (outpacing Disney, Netflix and even Amazon). The company will aim to expand their streaming services (which includes WarnerMedia's HBO Max) to reach 400 million global subscribers.[96][97]
On June 1, 2021, it was announced that the merged company would be known as Warner Bros. Discovery, and an interim wordmark was unveiled with the tagline "The stuff dreams are made from"—a line from the 1941 Warner Bros. film The Maltese Falcon. Zaslav stated that the name would reflect "the combination of Warner Bros.' fabled hundred-year legacy of creative, authentic storytelling and taking bold risks to bring the most amazing stories to life, with Discovery's global brand that has always stood brightly for integrity, innovation and inspiration".[98] On June 7, 2021, Discovery announced that it would divest Great American Country to GAC Media, a new Fort Worth-based investment group led by Tom Hicks and former Crown Media Holdings CEO Bill Abbott.[99]
Electronic Arts, who were a bidder in the proposed sale of Warner Bros. Interactive Entertainment, purchased the mobile gaming studio Playdemic from WBIE for US$1.4 billion in the same month.[100]
In September 2021, Fox Corporation acquired TMZ from WarnerMedia in a deal worth about $50 million with TMZ being operated under the Fox Entertainment division.[101]
In November 2021, Discovery and WarnerMedia discussed a plan to combine the two streaming services, HBO Max and Discovery+, into one streaming service in two phases: an initial phase that allows for quick bundling of the services and a second phase that allows for a common service on one tech platform.[102] In the same month, it was announced that Discovery will rename itself Warner Bros. Discovery and reclassify and convert its stock into stock of WBD.[103]
On December 22, 2021, it was announced that the transaction was approved by the European Commission and it is expected to be completed in mid-2022, subject to approval by Discovery shareholders and additional closing conditions.[104][105]
On January 5, 2022, The Wall Street Journal reported that WarnerMedia and Paramount Global (at the time known as ViacomCBS) were exploring a possible sale of either a majority stake or all of The CW, and that Nexstar Media Group (which became The CW's largest affiliate group when it acquired former WB co-owner Tribune Broadcasting in 2019) was considered a leading bidder.[106] The news led to speculation that, should a sale take place, new ownership could steer the network in a new direction, transforming The CW from a young adult-oriented network into one that featured more unscripted and even national news programming.[107] However, reports also indicated that WarnerMedia and ViacomCBS could include a contractual commitment that would require any new owner to buy new programming from those companies, allowing them to reap some continual revenue through the network.[108] Network president/CEO Mark Pedowitz confirmed talks of a potential sale in a memo to CW staffers, but added that "It's too early to speculate what might happen" and that the network "must continue to do what we do best."[109]
On January 26, 2022, it was reported that the merger between WarnerMedia and Discovery, Inc. was expected to close sometime during the second quarter of 2022.[111][112] This was later narrowed down to mid-April 2022.[113] On February 1, 2022, it was reported that AT&T had elected to structure the merger as a spin-off of WarnerMedia, followed by a merger with Discovery Inc. to form the new company. The company had been contemplating structuring the transaction as a split-off (under which AT&T shareholders would be given the option as to whether to exchange their shares for those of the new company, rather than receive them pro rata).[114][115] On February 7, the merger was approved by the Brazilian antitrust regulator Cade.[116] It was approved by the United States Department of Justice two days later.[117]
The transaction was approved by Discovery shareholders on March 11,[118] and formally completed on April 8, 2022.[118]
