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A new streaming competitor will be born to face Netflix and Disney +

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From this merger, a new entertainment and content production giant could rise to compete with Netflix and Disney. AT&T has already made public the spin-off of its WarnerMedia division and merged it with Discovery, in a $ 43 billion deal, according to some sources.

The new company to be born from this partnership will combine several assets, including the film division Warner, HBO Max and the streaming service Discovery +, thus placing itself in pole position to compete with Netflix, Disney + and other rivals in the same segment.

In light of the terms of the agreement, AT&T will receive the US $ 43 billion, both in cash and in debt. It will own 71% of the new company (separate from AT&T), while Discovery will control the remaining 29%. The business partnership will be chaired by Discovery CEO David Zaslav, with executives from both companies playing “important leadership roles”.

A new streaming competitor will be born to face

“This agreement brings together two entertainment leaders and positions the new company as one of the leading global consumer streaming platforms,” ​​said John Stankey, AT&T CEO in a statement.

In 2018, AT&T had purchased WarnerMedia as part of the Time Warner acquisition for US $ 109 billion. At the time, Telecom had said that the deal was a “perfect match” that would combine top-notch content with AT & T’s extensive distribution network. However, AT&T had trouble executing this plan largely because of the strong competition from Netflix, Disney + and a host of other services that emerged later. In addition, it also had a large amount of debt derived in part from the purchase business.

Discovery apparently emerged victorious in this business over NBCUniversal, according to THR. This business partnership will have three billion US dollars in “cost synergies” and could yield up to 52 billion US dollars in revenue by 2023.

Source: Engadget

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