Discovery takes control of HBO, CNN and Warner, creating new media giant

Warner Bros. Discovery began to be publicly traded on Monday (11). The company is the result of the merger, completed last Friday (8), of Discovery and WarnerMedia, which creates a streaming media giant led by CEO David Zaslav.

“I am confident that our collective energy and genuine love for these businesses and brands will build the most dynamic media and entertainment company in the world,” Zaslav said in a statement to employees Friday afternoon.

The deal combines two sources of content and hints at further changes in the streaming era.

Zaslav said that Warner Bros. Discovery “can drive high-quality content creation, create more opportunities for underrepresented storytellers and independent creators, and serve customers with more innovative video experiences and engagement points.”

The deal, first announced last May, is emblematic for Zaslav and his longtime representatives at Discovery, best known for brands including Animal Planet, TLC and HGTV.

The merger adds HBO, CNN, TNT, Turner Sports, the Warner Bros. and a host of other media assets to the company.

Setting the stage to compete with companies like Disney and Netflix, Zaslav said in Friday’s memo that “we are well positioned to become a top-tier streaming competitor.”

He confirmed that the main streaming services on either side of the company, HBO Max and Discovery+, will be brought “into a single product in the future.”

The merger elevates Zaslav to the highest level of the media business, controlling everything from a legendary movie studio to a global news network.

As Rich Greenfield, the influential media analyst at LightShed Partners, told CNN Business“David can really beat Goliath!” Greenfield said that “Zaslav and his team find themselves in a position unimaginable two years ago — sitting near the top of Hollywood.”

AT&T shareholders, which spun off WarnerMedia earlier this week, own 71% of the new company’s shares, and Discovery shareholders own 29%. But the transaction represents AT&T’s reversal of an earlier plan to become a media heavyweight.

With Friday’s deal “closed,” in Wall Street’s rant, AT&T officially scrapped its 2018 acquisition of Time Warner and returned to focusing on its core business.

AT&T CEO John Stankey bid farewell to the media company in a memo to employees on Friday. “Getting to this point was one of the hardest decisions of my life,” he said.

“I’m sure you’re not surprised that it came with a fair amount of anxiety, disappointment, and worry about the changes it would trigger. All things considered, I remain confident that we have set out on the right path.”

“Over time,” Stankey wrote, “the combination of WarnerMedia and Discovery will bring about a stronger company and accelerate the already strong pace of innovation and change you’ve established.”

Warner Bros. Discovery is anticipating $3 billion in what companies often call “synergies,” meaning the combination will almost certainly lead to layoffs. Many of Warner’s top executives have already left the company, including WarnerMedia CEO Jason Kilar, whose last day was Friday.

Zaslav wrote in an internal statement Thursday that “we are establishing a simpler organizational structure with fewer layers, more accountability, and more screen-focused features.”

Discovery executive Bruce Campbell will oversee all revenue for the new company. JB Perrette will handle global streaming and interactive entertainment, and Kathleen Finch will handle all cable networks except CNN and HBO.

THE CNN will be operated separately, with Chris Licht becoming president and CEO of CNN Global. All will report to Zaslav.

Three key creative executives at WarnerMedia will also report directly to Zaslav: HBO Chief Content Officer Casey Bloys; Channing Dungey, president of Warner Bros. Television Group; and the president of Warner Bros. Picture Group, Toby Emmerich.