AT&T is effectively throwing in the towel on entertainment. The telecom giant is in talks to sell WarnerMedia to Discovery Inc., the John Malone–controlled TV firm, said a person familiar with the situation. If the deal is consummated—and antitrust scrutiny will be a potential stumbling block—it will scramble the streaming video market just as it has entered a critical point of growth.
The combination of Warner and Discovery will be one of the biggest entertainment companies in the U.S., owning HBO and HBO Max, Warner Bros. and a slew of other cable channels including CNN, TNT, TBS, Discovery and HGTV and the Discovery+ streaming service. Its combined revenues would be $41 billion a year—a little smaller than Disney, now the industry leader.
