WarnerMedia and Discovery Inc. may be considering a merger, which would further shrink the pool of companies doing business in the entertainment industry. According to a report by Bloomberg, Warner's parent company AT&T Inc. is in talks to merge WarnerMedia with Discovery Inc. — possibly as soon as this week. This move is surprising considering that AT&T acquired Time Warner Inc. less than three years ago.
This deal would add Discovery's vast reality TV lineup to AT&T's existing stall of entertainment properties, including HBO, Cartoon Network, CNN, TBS, TNT and Warner Bros. Studios. Meanwhile, Discovery Inc. includes HGTV, Food Network, TLC and Animal Planet. The sources who revealed this deal to reporters asked not to be identified because the whole negotiation is still private.
If AT&T is not already a competitor on the same level as Netflix and Disney, this deal would certainly level the playing field. However, some critics fear it would go even further, giving AT&T too much power in the media industry. The company has already combined telecommunications and media assets under one roof — something that seemed unthinkable years ago.
It could also spell bad news for some of the most obscure shows or even channels within the company. AT&T CEO John Stankey has reportedly been actively culling underperforming properties since the Warner merger in 2018 while directing more and more assets towards its streaming service HBO Max. Content considerations come secondary to the company's goal of rolling out 5G wireless service across North America.
As with previous media mergers, many people on social media expressed fears about monopolies emerging in the entertainment industry. Many writers, actors and creators of other types also feared that this would shrink the field of potential employers and ultimately leave fewer jobs for them, and fewer places to pitch shows and movies.
"Discovery is maybe small enough to where it could fly at least legally but it's still troublesome to think about how much of the market share some of these companies have," one person wrote. Another person added: "I highly doubt [The Justice Department] will agree to this," tagging the government agency responsible for enforcing anti-trust laws. However, others disagreed, imagining that the merger would pass just fine.
So far, AT&T and Discovery Inc. have not confirmed these reports or commented on them publicly. If the merger goes forward, it could be announced as early as this week.