WarnerMedia tie-up with Discovery

WASHINGTON: AT&T said Monday it was spinning off its WarnerMedia unit and combining it with Discovery, creating an independent firm that could take on industry leaders such as Netflix in the fast-growing streaming sector.

The deal, which signals the telecom giant’s retreat from ambitions to be a player in the entertainment world, carves out the AT&T division which includes HBO, Warner Bros studios and CNN.

AT&T will receive $43 billion and AT&T’s shareholders will own 71 percent of the new company, with Discovery — which operates Discovery Channel, Food Network, Animal Planet and others — holding 29 percent.

The spinoff creates a “pure play” media company which can ramp up its streaming efforts against rivals such as Netflix, Disney+ and Amazon Prime Video, while allowing AT&T to focus on its mobile phone and broadband operations. Discovery president chief executive David Zaslav will lead the new company, which will include HBO’s “Games of Thrones” franchise, the Warner Bros library of “Batman” films, and TV channels such as Discovery, Cartoon Network, HGTV, TNT, TBS and Eurosport.