Discovery’s merger with WarnerMedia could take effect as early as Friday

The formation of Warner Bros. Discovery is almost complete.

As Variety’s Jennifer Maas first reported Tuesday, the pending merger between Discovery and WarnerMedia could be “closed,” in Wall Street lingo, as soon as Friday’s close of business. (WarnerMedia is CNN’s current parent company, and CNN will be a part of this new media juggernaut.) A person familiar with the matter confirmed to Brian Stelter and myself that Friday’s timing is possible.

Companies have been planning this moment for almost a year. For the past few weeks, Monday the 11th has been tentatively marked as the closing date. Now it could be a few days earlier.

Discovery and AT&T are not publicly commenting. But there are plenty of signs that the deal is closing fast and David Zaslav is heading the company. On Tuesday, AT&T officially began its spinoff from WarnerMedia and implemented a stock dividend that will give shareholders some equity in the new company. AT&T shareholders will control 71% of Warner Bros. Discovery. “This is going to be the most exciting story for the industry in years to come,” top industry analyst Jessica Reif told Yahoo Finance.
The spin-off was accompanied by WarnerMedia CEO Jason Kilar, who officially announced that he will be leaving the company on Friday. “As the upcoming transaction with Discovery nears completion, now is the right time to tell each of you that I am leaving this amazing company,” Kilar told employees in a memo on Tuesday.

In his note, Kilar called leading WarnerMedia “the honor of my life.” Several of his key lieutenants leave as well, making way for Discovery.

Kilar’s lasting impression on Warner

During his tenure as CEO, Kilar brought a new streaming-era mentality to a number of companies — including HBO and CNN — that were historically siled and focused on cable and satellite relationships. We talked about it last week while he was hanging out with the tech team leading the launch of CNN+. The three keys in this new world, he said, are customer acquisition, engagement and retention — getting subscribers, keeping subscribers coming back for fresh and compelling content, and giving them reasons not to cancel. I know that sounds like common sense to some, but it requires a fundamental mindset shift for traditional media companies.

Speaking on CNBC, Kilar said his advice to Warner Bros. Discovery leaders is to “start and end with storytelling and stick to that thread and also recognize what’s working really well, which is clearly the streaming side of the story.” Business and gaming is side of business.” Kilar said he has no “big proclamations” to make about his own future, but said, “I don’t go to a beach to think or to retire…”

Sarnoff and Forssell also want to get out

“The credits are rolling for WarnerMedia’s top executives,” wrote WSJ’s Joe Flint on Tuesday.
Warner Bros. CEO Ann Sarnoff, who has headed the studio since 2019, will leave the studio at the same time as Kilar, the NYT’s Brooks Barnes reported, citing three sources, and said a formal announcement would be made soon. Like Kilar, he wrote, “Sarnoff found himself without a seat in the musical chair game that accompanies the merger of competing companies”. While the new structure is “still unknown”, Zaslav is said to be taking over “at least part” of their portfolio.
HBO Max boss Andy Forssell is also leaving the company, Variety’s Matt Donnelly and Jennifer Maas announced. As Deadline’s Anthony D’Alessandro and Dade Hayes reported, JB Perrette, Discovery’s head of streaming, “was widely speculated to acquire the combined direct-to-consumer streaming operations of the newly merged company even before Forssell’s exit became official “. All in all, HBO content boss Casey Bloys is expected to stay, D’Alessandro and Hayes reported…

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