AT&T spins off WarnerMedia and once again focuses on telecommunications

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AT&T announced on Monday it will Strip WarnerMediaIn less than three years-including HBO and Warner Bros.-entered a new company AT&T purchased Time Warner, $108 billion.

American Telephone and Telegraph Company The company said it has reached an agreement with the media company Discovery to merge the assets of WarnerMedia and Discovery into an “independent global entertainment company.” AT&T will obtain $43 billion in an all-stock transaction through “cash, debt securities, and WarnerMedia’s retention of certain debts.” AT&T shareholders will receive 71% of the new media company, and Discovery shareholders will own the other 29% Of shares.

AT&T is expected to spend a full year to complete the spin-off and merger with Discovery. AT&T said: “This transaction is expected to be completed in the middle of 2022, subject to the approval of Discovery shareholders and customary closing conditions, including regulatory approval.”

AT&T said it will shift its focus to Broadband.

“For AT&T shareholders, this is an opportunity to unlock value and become one of the broadband companies with the highest capital, focusing on investing in 5G AT&T CEO John Stankey said: “AT&T shareholders will retain their shares in leading communications companies and bring attractive dividends. AT&T shareholder John Stankey said. In addition, they will receive new The company’s shares, which is a global media leader, can build one of the world’s top streaming media platforms.”

The unnamed WarnerMedia/Discovery company will be composed of more than 100 brands, including “HBO, Warner Bros., Discovery, DC Comics, CNN, Cartoon Network, HGTV, Food Network, Turner Networks, TNT, TBS, Eurosport, Mulan, TLC Law, Animal Planet, ID, etc.”

Monday’s AT&T announcement will be released only two weeks later Verizon says it has agreed to sell Yahoo and AOL sold to private equity firm Apollo Global Management for $5 billion. The telecom giant’s bet on the media business has not paid off as they hoped, but AT&T’s investment in the media is much larger than Verizon’s.

Yesterday’s announcement “recognized that investing a large amount of content assets in a wireless phone company does not have lasting synergy,” CNBC wrote. “If anything, WarnerMedia has become an albatross of AT&T stock. Since the transaction was completed on June 14, 2018, they have not performed as well as Verizon and T-Mobile.”

Both AT&T’s Time Warner and DirecTV acquisitions were carried out under the leadership of Randall Stephenson, the former CEO of Stankey.

AT&T eliminated approximately 45,000 jobs media with telecommunications The business unit after the acquisition of Time Warner. AT&T has 273,210 employees Immediately after acquiring Time Warner for $228,470 in mid-2018 As of March 31, 2021.

Stephenson has claim AT&T will create “7,000 [the] Ground” in exchange for substantial corporate tax cuts. AT&T continues to lay off employees, impairing its ability to lay off employees Expand its fiber optic network And maintain its original copper network.Report commissioned by the California State Government Established Although AT&T’s telephone prices have increased by 152.6% in the past 12 years, it has neglected its copper wire telephone network, making it worse, especially in low-income communities and areas with no substantial competition.

With AT&T retaining its core telecommunications business, the company stated that the transaction “created two separate companies-one broadband connection and the other media-to strengthen investment focus and attract each company’s best investor base. “The telecommunications company said it will return $43 billion to AT&T, and it will become “one of the most capitalized 5G and fiber-optic broadband companies in the United States.”

The transaction announcement stated that the WarnerMedia/Discovery company “will be able to invest in more original content for its streaming services, enhance its global linear pay TV and radio channel programming options, and provide more innovative video experiences and consumers Choice.” Stankey said that the transaction “will support the rapid growth and international distribution of HBO Max through Discovery’s global footprint, and improve efficiency. [that] It can be reinvested in the production of more exciting content, so as to provide consumers with what they want. “

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