US telecom giant AT&T on Monday announced it would merge its content unit WarnerMedia with media company Discovery, creating a new streaming giant that could go head-to-head with Netflix and Disney.
In the press release, AT&T highlighted that the deal had “at least $3 billion in expected cost synergies annually.” These “synergies,” or cost reductions, would allow the newly formed company to invest in its content and scale its business, AT&T said.
Cost “synergies” are a commonfeature of big deals, especially when companies have overlapping operations, as is the case with WarnerMedia and Discovery. They can take many forms, including layoffs, the consolidation of suppliers, or the sharing of office space.
WarnerMedia – which includes HBO, TNT, CNN, and Warner Bros. – and Discovery both have entertainment and news assets. Both have streaming platforms: HBO Max for WarnerMedia, and Discovery Plus for Discovery.
AT&T did not detail the cost savings when it announced the deal Monday. Insider has reached out to AT&T and Discovery for comment.
AT&T shareholders would receive stock equating to 71% of the new company, while Discovery shareholders would own 29%, the companies said in the press release.
AT&T on Monday announced plans to merge its WarnerMedia content unit, which includes HBO, TNT, CNN, and Warner Bros., with Discovery.
The deal paves the way for a new streaming giant that could compete with Netflix and Disney.
AT&T intends to split off the assets it acquired when it bought Time Warner for $85 billion in 2018.
AT&T would receive $43 billion in cash, debt securities, and WarnerMedia’s retention of certain debt under the proposed deal, according to an SEC filing. AT&T shareholders are set to receive stock equating to 71% of the new company, with Discovery shareholders owning the remainder.
The transaction, which has already been approved by both the AT&T and Discovery boards, is anticipated to close in mid-2022.
In its SEC filing, AT&T said that it expects the new company to have a 2023 revenue of around $52 billion.
AT&T said that the deal would create at least $3 billion in expected “cost synergies” annually for the new company, which could mean job cuts.
Discovery President and CEO David Zaslav is set to lead the proposed new company. Its board of directors will have 13 members: seven appointed by A&T, and six appointed by Discovery.
The company said it would combine WarnerMedia’s entertainment, sports, and news assets with Discovery’s entertainment and sports businesses to create “a premier, standalone global entertainment company.”
AT&T said that the new company would be able to invest in more original content for its streaming services, create new opportunities for under-represented storytellers and independent creators, and create more family-friendly nonfiction content.
AT&T had been planning to expand HBO Max internationally, and the Discovery combination could be a big boost to those plans. Discovery owns European rights to Olympic Games and owns Eurosport.
AT&T, which has been led by John Stankey since July 2020, has seen steady growth of HBO Max since it launched last year. It gained almost 3 million subscribers in the first quarter of 2021, bringing total subscribers to 9.7 million. The platform is set to expand its reach from just the US, launching in Latin America next month. In total, HBO Max and HBO combined have about 64 million subscribers globally, compared to Netflix’s 208 million.
Discovery Plus launched in the increasingly crowded streaming market in January. The streaming platform is home to 55,000 episodes of shows from brands like HGTV, Food Network, TLC, A&E, History Channel, and the Discovery Channel, which airs the popular Shark Week series each year. Discovery Plus also features content from the BBC.
This is a developing story. Please refresh for updates.
Companies including Toyota, JetBlue, and Cigna are still donating thousands of dollars to the lawmakers who voted against Joe Biden’s certification as president.
After a mob of Trump supporters stormed the US Capitol on January 6 to try and prevent Congress from certifying Biden’s win, many top US companies scrambled to cut ties with the 147 GOP lawmakers who voted against the results.
A further group of companies said they would review their contribution policies or would take the January 6 events into account when awarding funding.
Jeffrey Sonnenfeld, founder of Yale’s Chief Executive Leadership Institute, told Axios in March the companies that halted political donations are unlikely to lift this ban any time soon. However, recent Federal Election Commission filings show that some companies are still giving to these lawmakers.
Color of Change, which says it is America’s largest racial justice organization and has more than 7 million members, is urging these companies to halt the donations.
Jade Ogunnaike, senior campaign director at Color of Change, told Insider that Trump’s presidency “undermined faith in our democracy.”
She said lawmakers including Texas Sen. Ted Cruz and Missouri Sen. Josh Hawley, who voted against Biden’s certification, “would have been very happy to do anything possible that they could to ensure that Trump remained in the office.”
“You can’t forget that these are not congresspeople that we can trust,” Ogunnaike added.
“It’s incredibly important that corporations understand that and refuse to back people who were supporting violence in the transfer of power,” she said.
The vast majority of corporations who pledged to stop funding these GOP lawmakers have stayed true to their word – but some companies who made vaguer promises about assessing PAC criteria have restarted donations, while others gave money instead to various Republican committees that, in turn, fund these lawmakers.
Here are the companies that have still been funding these 147 objectors, according to Federal Election Commission data up to March 31.
Toyota’s corporate PAC has given to 40 of the lawmakers who voted against Biden’s certification, Popular Information reported, with the donations totalling $62,000. This includes $5,000 to Michigan Rep. Jack Bergman and $3,500 to Arizona Rep. David Schweikert.
The automaker had previously told Automotive News it was assessing its PAC criteria following the Capitol siege.
“Toyota supports candidates based on their position on issues that are important to the auto industry and the company,” a Toyota spokesperson told Insider.
“We do not believe it is appropriate to judge members of Congress solely based on their votes on the electoral certification,” the spokesperson said. “Based on our thorough review, we decided against giving to some members who, through their statements and actions, undermine the legitimacy of our elections and institutions.”
Health insurer Cigna said in January it would pause contributions to lawmakers “who encouraged or supported violence, or otherwise hindered a peaceful transition of power,” but added that this group doesn’t necessarily include all 147 GOP objectors.
The company gave money to at least six of the lawmakers who voted against Biden’s certification, Forbes reported. This included $1,000 to Florida Rep. Byron Donalds, $1,500 to South Carolina Rep. Tom Rice, and $2,500 to Pennsylvania Rep. John Joyce.
“In January, we disqualified certain elected officials from CignaPAC support based on alignment with our company values,” Cigna told Insider in a statement.
“Our new standard applies to those who incited violence or actively sought to obstruct the peaceful transition of power through words and other efforts. Congressional votes are, by definition, part of the peaceful transition of power outlined by law, and therefore, we believe are not the appropriate indicator for the application of our policy.”
Cigna added that its PAC remains nonpartisan and “focused on the common concerns of the employees who fund it.”
Popular Information reported that Koch Industries gave a total of $17,500 to six lawmakers who voted against Biden’s certification, including North Carolina Rep. Richard Hudson and Kansas Rep. Ron Estes.
This came after the Koch political network, which is also controlled by billionaire businessman Charles Koch, told Politico that “lawmakers’ actions leading up to and during last week’s insurrection will weigh heavyin our evaluation of future support.”
The chemical-manufacturing company did not respond to Insider’s request for comment.
During this time period, it was the third-biggest PAC donor to the lawmakers who later voted against Biden’s certification, giving $1.27 million to these lawmakers out of the total $13.7 million it spent on political contributions, data from political-transparency site Open Secrets shows.
The New York Times reported that in the first quarter of 2021 the National Association of Realtors gave to multiple objectors, including $1,000 each Alabama Rep. Robert Aderholt and California Rep. Ken Calvert.
The association, which told Insider that it had 1.4 million members, said it put a temporary pause on all federal political disbursements in place after the siege, but had lifted it.
“This decision will ensure we continue to engage with political candidates in an effort to support America’s homeowners and our nation’s real estate industry,” it said, adding that its PAC was bipartisan.
JetBlue told Insider that it temporarily paused its donations to get feedback from PAC contributors. Since then, its PAC has donated $1,000 to New York Rep. Nicole Malliotakis, who voted against Biden’s certification.
“We take a bipartisan approach, supporting both Republicans and Democrats,” a spokesperson for JetBlue said, adding that its PAC had donated to two further Republican candidates and four Democratic ones since resuming contributions, none of whom had voted to challenge the election results.
“By having relationships with candidates on both sides of the aisle, we can also maintain a voice in the room on issues that are important to our crewmembers,” the spokesperson said. “We’ll continue to have an open dialogue with PAC contributors to understand how and where their contributions should be directed.”
Jones Walker, one of the US’ largest law firms, donated $1,000 to Illinois Rep. Mike Bost, Popular Information first reported.
The New Orleans-based company didn’t respond to Insider’s request for comment.
Cubic Corporation, LKQ Corporation, and the Sierra Nevada Corporation
Forbes also reported that defense contractor Cubic Corporation gave to at least eight lawmakers who refused to certify, auto-parts distributor LKQ Corporation to at least eight, and aerospace company Sierra Nevada Corporation to least seven.
Cubic declined to comment, while LKQ Corporation and the Sierra Nevada Corporation did not respond to Insider’s request for comment.
Some PACs, meanwhile, haven’t given directly to the 147 objectors — but are members of trade associations that themselves gave to these lawmakers, Popular Information said.
The American Financial Services Association, for example, counts General Motors and Wells Fargo among its members. Both said they would pause all political donations, and have kept true to their word — but AFSA donated $1,000 to South Carolina Rep. William Timmons in February, FEC filings show. ASFA’s PAC donates heavily in favor of Republicans, data from Open Secrets shows.
Another way corporate PACs have been indirectly funding the lawmakers who voted against Biden’s certification is through donations to committees such as the National Republican Senatorial Committee (RNSC).
Popular Information reported that Pfizer donated $15,000 to the NRSC in February, which is run by Florida Sen. Rick Scott, who objected to the election results. These funds will also benefit the seven other GOP senators who voted against Biden’s certification, the publication reported.
Cigna also donated $15,000 to the NRSC, alongside a further $15,000 to the National Republican Congressional Committee (NRCC).
Intel also gave $15,000 to the NRCC after it had said it would stop donations to the 147 objectors.
The tech company told Insider that its policy of halting direct contributions to members of Congress who voted against certificating the Electoral College results still applied.
It said that it divides its political contributions evenly among Republicans and Democrats, including individual candidates, campaign committees, and governors associations, and added that it continuously evaluates its contributions.
Communications giant AT&T had also said in January that it would halt contributions to the lawmakers who voted against Biden’s certification, but it donated $5,000 to the House Conservatives Fund in February, which fundraises for the Republican Study Committee, itself made up mainly of GOP objectors.
AT&T told Popular Information that the House Conservative Fund had “assured” them that none of this money would go to support the re-election of the 147 objectors.
Insider has contacted Pfizer and AT&T for comment.
Color of Change wants these companies to address their political contributions
“At Color of Change we’re not supporting a boycott [of these companies] necessarily,” Ogunnaike told Insider. Instead, the organization is asking people to design a petition asking that these companies stop funding these lawmakers.
She added she also recommended that customers contact these companies and share their point of view.
“What we see is that corporations are very, very reactive to the concerns of consumers,” she said. “We’ve seen corporations change their minds on an important issue within moments because consumers reached.”
Advertisers are fretting about how Apple’s policy will limit campaign measurement and attribution, especially on Facebook.
The change could wipe out as much as 7% – or $5 billion – of Facebook’s total revenue in the second quarter of 2021, estimated mobile consultant Eric Seufert.
There’s opportunity for others as marketers lean more on first-party data like email addresses and look for help solving issues like measurement and identity. We identified 12 companies best positioned to ride out Apple’s privacy changes.
Meanwhile, As Apple tightens the screws on ad tracking, it’s preparing a new ad format of its own. Its Suggested Apps ad format opens up a potentially lucrative new revenue stream as other tech platforms like Facebook and Snap, have said Apple’s changes could hurt their businesses.
Apple has made privacy central to its brand. Nevertheless, a 2015 iAd pitchdeck obtained by Insider shows how it was happy to promote personalized advertising on the back of iTunes data, including segments such as their age, gender, and past interactions with ads.
Instagram’s new creator tools
New monetization features are pivotal for Instagram and Facebook as they compete for creators with platforms like YouTube and TikTok.
Sydney Bradley got the details on new ways the companies are trying to help creators make money, including:
Putting more resources toward creator shops and commerce using Instagram’s shopping features.
Introducing native-to-Instagram affiliate-marketing tools that will let creators “get a cut” from the sales they are driving on Instagram.
Sean Czarnecki caught up with the new US chief of Edelman, the world’s biggest PR firm. Ross, the first Black woman to lead a major PR agency, is charged with overseeing the firm’s biggest regional business and bolstering its diversity efforts. From his interview:
Hiring is not the problem. Retention is where we struggle in terms of creating a culture where people feel like they belong and can contribute and don’t have to code-switch.
I also think sponsorship is important. We have recently been more intentional about conducting talent reviews to help identify career paths, promote from within, and provide additional opportunities for exposure and learning.
While we focus on all employees, it is important to ensure specific focus on areas where we need to increase representation.
WarnerMedia’s HBO Max gained almost 3 million subscribers in the first quarter of 2021, but fell short of Netflix’s worst miss since 2013. Netflix added about about 4 million subscribers – 2 million shy of its initial projections for the quarter. It’s now projecting just 1 million subscriber additions in Q2.
AT&T, the corporate parent of WarnerMedia, said during its Q1 earnings report on Wednesday that Max now had 9.7 million retail subscribers (those who subscribe directly to Max), an increase of 2.8 million from the previous quarter. It didn’t disclose “activations” as it previously has, which account for HBO customers who have accessed their Max subscription.
The results come after a quarter in which WarnerMedia made bold moves to help boost Max subscribers. Its decision to release movies simultaneously in theaters and on HBO Max this year was particularly met with backlash in Hollywood.
That didn’t seem to translate into huge subscriber growth, however.
Still, despite lackluster quarters, there’s some good news for both Netflix and Max.
Netflix missed subscriber expectations, but churn decreased. As Insider’s Ashley Rodriguez reported, retaining existing subscribers could help Netflix sustain its edge in the streaming space during what will be a challenging year after pandemic-related growth in 2020. Netflix has 207 million subscribers worldwide, with 67 million in the US.
And data has shown that WarnerMedia’s hybrid theatrical/streaming strategy has helped Max. “Wonder Woman 1984,” which debuted on Max and in theaters at the same time, generated 4.3 times the signups compared to the average weekend in December, according to the analytics firm Antenna.
As more Warner Bros. movies are released throughout the year under the same strategy, including “The Suicide Squad,” “The Conjuring: The Devil Made Me Do It,” and “Dune,” Max could benefit.
HBO Max is a streaming service that blends HBO’s library of prestige original series with a huge catalog of blockbuster movies and TV shows provided by WarnerMedia. HBO Max launched in May 2020 for $15 a month.
Most people who subscribe to HBO through cable can claim their own free HBO Max subscription using their provider. In January, parent company AT&T said the service had already reached 40 million subscribers in the US, surpassing a goal it didn’t expect to reach for two more years.
If you currently pay for HBO in your cable package, you likely already have access to HBO Max as part of your subscription. Depending on your provider, you may be able to sign directly into the HBO Max app, or you’ll be prompted to create an account. You can view a full list of qualifying HBO Max providers here.
Max (small)Monthly Subscription (small)
How much does HBO Max cost?
HBO Max costs $15 a month, the same price as regular HBO and three dollars less than a premium Netflix subscription. For that price, you get ad-free access to all of the platform’s content.
As mentioned above, most people who already subscribe to HBO are eligible to receive HBO Max at no extra cost to their current subscription fee.
Though HBO Max initially offered a free trial period through its site, that promotion is no longer available. If you sign up for HBO Max as an add-on through Hulu, however, new members can still receive a one-week trial.
The differences between HBO Max, HBO Go, and HBO Now
HBO Max is an on-demand streaming platform combining HBO’s iconic original programming with an even larger library of movies and shows from WarnerMedia. The service is essentially a replacement for HBO’s older streaming options: HBO Go and HBO Now.
HBO Go was a streaming companion app for HBO cable subscribers, while HBO Now was a standalone streaming option with access to HBO without cable. On July 31, HBO discontinued the HBO Go app. On that same day, HBO rebranded HBO Now to just “HBO.”
HBO (formerly HBO Now) will continue to include streaming access to the same library of content that HBO cable subscribers can watch. This includes HBO original programming and the channel’s rotating selection of movies.
HBO Max, however, builds upon this content selection by incorporating more original titles and hundreds of additional TV shows and movies from WarnerMedia. HBO Max also allows you to download and store your favorite shows on your devices to watch while you’re offline.
For the time being, HBO and HBO Max each cost $15 a month. Since HBO Max offers a larger streaming library than HBO, it’s clearly the better choice.
Where can I watch HBO Max?
HBO Max can be streamed via its official website and the HBO Max app. You can find the app on Apple, Android, Roku, PlayStation, Xbox, Amazon Fire TV, Chromecast, and Samsung smart TVs.
Those who sign up for HBO Max directly though a partnered service, like Hulu or Apple TV, will be able to access regular HBO content through the partner service’s app. To watch HBO Max exclusives, however, you still need to use the separate HBO Max app.
Is HBO Max on Roku and Fire TV?
Though HBO Max was initially missing from Fire TV, Roku, and PlayStation devices when it launched in May 2020, the service is now available to download on all of those platforms.
Currently, LG’s smart TVs are the only major connected-devices that are missing native support for the HBO Max app.
What shows and movies are on HBO Max?
HBO Max features all of HBO’s original shows, from “The Wire” and “The Sopranos” to “Westworld and “Game of Thrones.” The library also includes the cable channel’s rotating lineup of movies. On top of all that, HBO Max offers additional titles from WarnerMedia’s catalog, as well as new exclusives.
HBO Max also features a handful of new original series, including the sci-fi show “Raised by Wolves,” the comedy series “Love Life” starring Anna Kendrick, and a new “Looney Tunes” show featuring Bugs Bunny and company.
Beyond original programs, the HBO Max catalog offers a wide range of TV series from DC, CNN, TNT, TBS, truTV, Cartoon Network, Adult Swim, Rooster Teeth, and Looney Tunes. The HBO Max movie catalog incorporates critically acclaimed films from the Criterion Collection and Studio Ghibli, alongside hundreds of blockbuster WarnerMedia movies. The service currently hosts 1,300 films.
The Securities and Exchange Commission filed a lawsuit against AT&T and three of its investor relations executives for allegedly revealing nonpublic information to analysts to avoid missing revenue estimates in 2016.
The SEC is seeking permanent injunctive relief and civil monetary penalties against each defendant.
AT&T didn’t respond to Insider’s request for comment but maintains the SEC claims are meritless.
“We look forward to having our ‘day in court’ to demonstrate conclusively that our investor relations employees complied with Regulation FD, and that the allegations in the SEC’s complaints are meritless,” AT&T said in a statement in response to the allegations.
The SEC argues that AT&T knew that it could miss analysts’ revenue estimates for its first-quarter in 2016 due to its larger-than-expected decline in its smartphone sales. To avoid missing estimates for the third consecutive quarter, the company’s investor relations executives, Christopher Womack, Michael Black, and Kent Evans, privately called analysts in around 20 separate firms, the SEC said.
During the phone calls, all three executives allegedly shared AT&T’s internal smartphone sales data and its impact on internal revenue metrics.
Following those calls, analysts reduced their revenue forecasts which led to a slightly lower overall revenue estimate than the one the company reported in April 2016, according to the SEC complaint.
AT&T said that there wasn’t any material disclosure made, and cited the lack of any market reaction to the company’s first-quarter results in 2016.
The company added that the material discussed was about the impact of removing subsidy programs on smartphone upgrade rates. Those subsidy programs allowed customers to upgrade their phones and without them, they were buying phones less frequently which as a result reduced equipment revenue.
AT&T said it disclosed this trend on multiple occasions and clarified that it will not impact its earnings.
The telecommunications company has been hit with other lawsuits since the beginning of 2021.
Last month, Washington D.C. Attorney General Karl Racine sued AT&T Mobility National Accounts for charging the city huge sums of money for cellphone and internet services when it was contractually supposed to provide the city the cheapest services available, Reuters reported. The company responded saying that the allegations were “entirely without merit.”
In January, Seattle company Network Apps LLC filed a lawsuit against AT&T accusing the company of patent theft of a technology that allows smart devices to respond to calls assigned to one phone number, Reuters reported. The company is facing a potential payout of at least $1.35 billion. AT&T said it would review the lawsuit and respond in court.
More than 150 executives from top US companies spanning a range of industries including finance, tech, and real estate have backed President Joe Biden’s $1.9 trillion coronavirus relief package in a letter sent to Congress Wednesday.
They include Blackstone CEO Stephen Schwarzman, who was a longtime ally of President Donald Trump; Google CEO Sundar Pichai; and Goldman Sachs CEO David Solomon.
The letter, written by the Partnership for New York City, was addressed to Charles Ellis Schumer, the Senate majority leader; Nancy Pelosi, the speaker of the House; Mitch McConnell, the Senate minority leader; and Kevin McCarthy, the House minority leader.
The letter calls for lawmakers to approve the relief package. The executives said they “urge immediate and large-scale federal legislation to address the health and economic crises brought on by the COVID-19 pandemic.”
“Previous federal relief measures have been essential, but more must be done to put the country on a trajectory for a strong, durable recovery,” the executives wrote.
“Congress should act swiftly and on a bipartisan basis to authorize a stimulus and relief package along the lines of the Biden-Harris administration’s proposed American Rescue Plan.”
John Zimmer, the cofounder and president of Lyft; Brian Roberts, the chairman and CEO of Comcast; Larry Fink, the chairman and CEO of BlackRock; and John Stankey, the CEO of AT&T, also signed the letter.
Executives from the following companies are among those that signed the letter:
Banking and investment: Goldman Sachs, BlackRock, Morgan Stanley, Visa, S&P Global, MasterCard, and Blackstone
Technology: Google, Intel, IBM, Siemens, Zoom, DoorDash, and Lyft
Hospitality and retail: Loews Hotels & Co, LVMH, Etsy, and Saks Fifth Avenue
Airlines: American Airlines, United Airlines, and JetBlue Airways
The role big businesses play in politics has come under scrutiny in the aftermath of the Capitol siege. Dozens of top US businesses halted donations to Trump and other lawmakers who challenged the election’s integrity.