After Spending $85 Billion on Time Warner, AT&T Wants Its Money Back

AT&T Inc. marched into Hollywood three years ago with huge aspirations to be a 21st-century media colossus, linking its thriving cellphone business with iconic media properties — HBO, Warner Bros. film and TV studio, and Turner networks, like cable news juggernaut CNN.


The Dallas telecommunications giant has announced that it plans to spin off its entertainment assets into a new venture with cable programming company Discovery, which owns HGTV, the Food Network, and Animal Planet. AT&T and Discovery were first reported to be in advanced talks to merge their entertainment properties by Bloomberg News.


Today, both companies officially announced the merger of WarnerMedia and Discovery, detailing their plans, with Discovery CEO David Zaslav to serve as CEO of the new company.



The transaction could reshape Hollywood, which has already seen dramatic contraction following Walt Disney Co.’s $71 billion acquisition of a large portion of Rupert Murdoch’s entertainment empire in 2019. Legacy media companies laid off thousands of workers last year during the COVID-19 pandemic, as once-loyal viewers fled to Netflix, Amazon Prime, and Disney+.


The new venture would bring together Discovery, one of the world’s largest producers of unscripted programming, and WarnerMedia, a leading producer of movies such as “Godzilla vs. Kong” and “Wonder Woman,” as well as TV shows such as “Game of Thrones,” “The Voice,” and “The Bachelor.”



The proposed transaction, which would require federal regulators’ approval, would be a stunning retreat for AT&T, which spent $85 billion three years ago to acquire Time Warner Inc., the owner of CNN, HBO, TBS, TNT, and the storied Warner Bros. film and TV studio, as well as DC Comics. AT&T now wants to divest those assets, though AT&T shareholders are expected to remain shareholders.


“What a dismal failure, and what an embarrassing chapter for what was once one of America’s most storied companies,” said Craig Moffett, a telecommunications analyst.



Mandy Parker

From a long line, family of geeks, author of several unpublished geek girl books, writer for @BleedingFool. Recovering Game of Thrones fan, life-time Tolkien fan.