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Closing titles roll as AT&T completes media sale to Discovery

Warner Bros Discovery.jpg

AT&T has finally offloaded its movie and TV interests to Discovery after completing its US$43 billion sale of the Time Warner interests it bought for twice that sum only three years ago.

After a long and ultimately successful court fight AT&T bought Time Warner and renamed it WarnerMedia. Now the media businesses will be Warner Bros Discovery (WBD), traded on Nasdaq from today.

AT&T CEO John Stankey, who inherited the media interests from his predecessor, Randall Stephenson, said: “We are at the dawn of a new age of connectivity, and today marks the beginning of a new era for AT&T.”

In the Stephenson era, cable channels and movies were seen as an essential part of the new AT&T, which also bought satellite broadcaster DirecTV for $67 billion. That was sold in 2021 to US investor TPG for $7.6 billion, packaged up with two other AT&T disposals, AT&T TV and U-verse, also once the future of the company.

AT&T had also founded an advertising platform, called Xandr – after Alexander Graham Bell, the inventor of the telephone – and then sold it to Microsoft last year for an undisclosed price.

Now, according to his weekend comment, Stankey wants to refocus AT&T on telecoms. “With the close of this transaction, we expect to invest at record levels in our growth areas of 5G and fibre, where we have strong momentum, while we work to become America’s best broadband company,” he said.

“At the same time, we’ll sharpen our focus on returns to shareholders. We expect to invest for growth, strengthen our balance sheet and reduce our debt, all while continuing to pay an attractive dividend that puts us among the top dividend paying stocks in America.”

AT&T shareholders have been rewarded for their patience with 0.241917 shares of WBD for each share of AT&T common stock they held at close.

As a result, AT&T shareholders received 1.7 billion shares of WBD, representing 71% of WBD shares on a fully diluted basis. Discovery’s existing shareholders own the remainder of the new company.

WBD’s channels include the original Discovery Channel, as well as Animal Planet, Cartoon Network, CNN, Eurosport, HBO, Travel Channel and Turner Classic Movies.

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