Warner Media/Discovery joint venture; thoughts and discussion

Is Rooster Teeth part of the deal? I heard that they are but their logo isn't featured on the board in that video.

Guess John Oliver has to blame a new business daddy for stuff, then.

Actually, this might incentivize him to make fun of AT&T even more.

I think they are, they just weren't on the board because of lesser name recognition than say, WB or HBO. Other stuff like NetherRealm should be included as well.

Edited by lbssb on May 17th 2021 at 9:38:31 AM

Apparently Jason Kiliar is already negotiating his exit.

Not surprising.

I had expected AT&T was keeping this from him for as long as they could so it's understandable he would want an early out. Still, how humiliating it must be to wear his shoes right now.

Edited by Mario1995 on May 17th 2021 at 1:20:50 PM

It's funny how they didn't even tell him practically until the deal went public. Did they know they fucked up by hiring him?

Maybe it was to deliver Laser-Guided Karma? Kiliar was the same dude who left Hollywood in the dark about about the day-to-date "strategy" until it was officially announced.

Edited by Mario1995 on May 17th 2021 at 1:34:42 PM

It looks like Warner Bros. Interactive Entertainment is potentially being split between AT&T and the new "Warner Bros - Discovery" company.

I made a separate post in the Video Game thread if it feels off topic for here. Though it's notable how AT&T was initially interested in selling off WB Games a couple of months ago.

Interesting insight from Variety on what went down.

Interestingly, the Archegos Capital debacle almost torpedoed the talks.

One of the big problems that AT&T had with Warner Bros is that they didn't know how to function in a properly competitive market where the standard corporate "increase profits every three months regardless of circumstances" model doesn't work properly. The American telecom industry is basically a group of regional monopolies so AT&T barely has to care about competing with anyone, and Hollywood is built around multiple year bets, more or less, in a way that AT&T can't manage. Everything they did and pushed for with Warner was with an assumption that following the leader with Disney would lead to surefire success which really isn't the case.

The apparent complete lack of communication is also pretty bad. They did a lot of things and major decisions without actually consulting with the relevant people first with the result being an endless string of terrible PR. Like the thing about movies getting limited HBO Max runs at the same time as the theatrical release. Might have been a good idea to actually check and make sure the production studios were fine with that? But because they decided it unilaterally, they ran directly into horrible PR and potential contract violations. Disney kind of did the same thing, but there, they're obviously doing it on a case by case basis, getting everything squared away behind the scenes first.

Worse in the case of the WB films going to HBO Max, they DID square it with Jenkins and Gadot for WW 84...where both got nice 20 million checks in return for allowing it to stream but then they just decided to do it for everybody else without that step ending up with ALLLOT of problems.

Not to mention that AT&T obviously didn't understand the relationship between Warner Bros and the production studios, given the backlash from Legendary who do a lot for Warner Bros...but aren't actually owned by them.

I'm honestly convinced that AT&T did that because Warner Bros let Netflix get their hands on Enola Holmes, which was basically well under the radar, and then it was a huge hit. Legendary (who made it) started talking to Netflix about Godzilla vs Kong and then the mandate came down out of nowhere, seemingly to stop another Enola Holmes from happening.

Considering all the various projects Legendary Pictures has in their queue, many of which are odd, I feel like they potentially lost a lot of future profit off the studio as a distributor since they're shopping their wares elsewhere now. I don't think Legendary immediately goes to Netflix with the Gundam movie if they're still on good terms with Warner, for instance.

I expect Discovery to tone down HBO Max perhaps even put back a 90 day window to keep studio and actors happy.

Nah. The 45-day window will probably be the new standard.

I should note that since the deal was announced, both AT&T and Discovery stock have fallen (granted it hasn't been a good day for any markets to begin with, but it's still remarkable). Turns out AT&T will be cutting its dividend (you know, the only reason people bought the stock after the TW merger) by half to help get this deal finalized. Whoof.

Meanwhile in the background, Amazon, Apple, Disney and Netflix are all laughing their asses off while Comcast and ViacomCBS are trying to figure out what to do next, since their last best chance to increase scale without pissing off antitrust regulators (a window which the Disney-21CF merger heavily narrowed already) has been lost.

If Comcast merges with ViacomCBS, we could finally get a Nick area at Universal Studios! Again!

Edited by HBarnill on May 18th 2021 at 11:08:42 AM

A ViacomCBS-Comcast merger would have to involve either CBS or NBC closing (meaning devastating layoffs) or spun out.

Edited by Mario1995 on May 19th 2021 at 5:23:59 AM

Apparently this merger will make future purchases easier,not looking forward to Disney or apple owning them

Thankfully Disney has enough scale and IP to not make any further purchases. Apple is a wild card, though.

I doubt Disney isn't interested, it's Disney after all. I'd say it's more that they have a lot on their plate that they're hunkering down on and so aren't as in a hurry to seize shit. Apple meanwhile would probably be more eager given they're still trying to make Apple TV+ a thing.

Disney has Disney animation and live-action, Marvel, Lucasfilm,, Fox (movies and shows), ABC, Disney Channel, FX, ESPN, Nat Geo, theme parks and a robust licensing operation all in their pockets. Their priority now is getting them all to work with DTC and thus far they've been the only one in the traditional media field to do it relatively successfully. Their goal now is to keep that momentum alive and kicking.

Iger and Chapek have been very clear that the days of strategic IP acquisitions are over, and that DTC is the top priority now. Hell, Iger is on the record saying 21CF was the last major acquisition they would make for the foreseeable future. The only people who say they don't have enough scale are fanboys with no attachment to reality.

Also, there would be a lot more overlap between Disney and WarnerDiscovery than there ever was with Disney and 21CF, and that would mean antitrust problems all around, more than they've ever had to deal with.

Edited by Mario1995 on May 19th 2021 at 10:40:42 AM

Potential antitrust violations are most likely going to be increasingly more common as we see more major consolidations of power. And obviously mega-corps like Disney only care in as much as they don't want the government on their ass.

Still, I could figure Disney's more recent moves as pushes on DTC but was not aware that they were making that their explicit primary focus above even IP consolidation. Honestly a sensible long-term move given the strength of their current IP and given the hyper-greed one usually expects from these sorts of companies.

Disney attempting to buy the new Warner Media would get way more scrutiny either way just because of how obvious the parallels are. DC is equivalent to Marvel, Nat Geo is equivalent to Discovery, that sort of thing. There's also just the brand weakening problem that would result from that. Sure, some people might think it would be amazing if DC and Marvel could crossover easily, but it wouldn't actually be good for coherent branding and it would make things a lot harder for the MCU people. I think, for example, Disney likes having the DC movies as competition because the constant faceplants on the part of Warner Bros makes Disney look that much better.

Not to mention they probably don't want Toby Emmerich or Jeff Zucker in their premises....