AT&T to form standalone media business

AT&T is set to build its own global entertainment and media business, combining its content from HBO, Warner Bros studios, and Discovery.

David Zaslav, Chief Executive of Discovery will spearhead the proposed new business, which will comprise one of Hollywood’s most powerful studios, including the Harry Potter and Batman franchises, news network CNN, sports programming and Discovery’s unscripted home, cooking and nature and science shows.

Announced on Monday, AT&T is poised to forge telecoms and media powerhouse through a flurry of deals including the 2018 $108.7 billion acquisition of U.S. media conglomerate Time Warner and the 2015 purchase of satellite TV service DirecTV for $68 billion.

Following the news, shares in Discovery soared around 16% to $41.3 in premarket trade but later fell 2% as investors digested that it would take time for Discovery to scale up in streaming, according to Rich Greenfield, partner at LightShed Partners.