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AT&T Q4 report suggests Q2 finalization of WarnerMedia, Discovery merger

AT&T’s fourth-quarter and full-year earnings conference call today (January 26) revealed not only that HBO Max has surpassed growth expectations for 2021, but also that the telcom giant may finalize ...
January 26, 2022

AT&T’s fourth-quarter and full-year earnings conference call today (January 26) revealed not only that HBO Max has surpassed growth expectations for 2021, but also that the telcom giant may finalize the megamerger between the streamer’s parent company WarnerMedia and Discovery, Inc. sooner than expected.

According to AT&T, WarnerMedia subscription revenues for 2021 amounted to $3.8 billion, reflecting a 5.4% rise from the previous year that was attributed primarily to the growth of the direct-to-consumer streaming service HBO Max. HBO Max and HBO now boast a global subscription base of 73.8 million, up 13.1 million over 2020.

WarnerMedia’s Q4 revenues came to $9.9 billion, a 15.4% rise over the previous year. This not only indicates a strong resurgence following the company’s pandemic-affected performance in 2020, but the higher-than-expected revenues also helped to offset overall losses for its parent company AT&T, which posted a $2.9 billion decline in consolidated revenues for the year ($168.9 billion versus $171.8 billion in 2020).

Also mentioned in AT&T’s official press release, and elaborated upon by AT&T CEO John Stankey (pictured) in the conference call, was the telco’s expectation that the merger between WarnerMedia and Discovery Inc. could be finalized by the end of the second quarter, rather than mid-2022 as previously forecast.

The merger deal, which was announced last May, will “combine WarnerMedia’s premium entertainment, sports and news assets with Discovery’s non-fiction and international entertainment and sports portfolio.” The deal will bring properties like the Discovery Channel, HBO, CNN, TBS, TNT, HBO Max, Discovery+ and the Warner Bros. film studio under one umbrella.

The new entity, to be called Warner Bros. Discovery, will be headed by current Discovery Inc. CEO David Zaslav. AT&T will receive $43 billion for its divestiture of WarnerMedia, and the telco’s shareholders will own 71% of the new media company, with Discovery Inc. shareholders owning the remaining 29%.

Today’s earnings report, and the follow-up comments from Stankey, indicate that AT&T is increasingly confident that the upcoming merger will have a smooth ride through the standard antitrust investigation currently being undertaken by the U.S. Department of Justice.

About The Author
Barry Walsh is editor and content director for realscreen, and has served as editor of the publication since 2009. With a career in entertainment media that spans two decades, prior to realscreen, he held the associate editor post for now defunct sister publication Boards, which focused on the advertising and commercial production industries. Before Boards, he served as editor of Canadian Music Network, a weekly music industry trade, and as music editor for HMV.com. As content director, he also oversees the development of content for the brand's market-leading events, the Realscreen Summit and Realscreen West, as well as new content initiatives.

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