Report: WarnerMedia-Discovery Deal A Win For John Malone

For watchers of cable TV and Liberty Media billionaire John Malone, Monday’s announcement that AT&T is bailing on its sideways attempt at becoming a media company comes as no surprise. Known as a swashbuckling dealmaker in the industry, Malone exploded into prominence in 1999 when AT&T paid $48 billion for Tele-Communications, the cable giant he built, lifting him out of cable’s engineering shadows and landing him a starring role as a content titan mentioned alongside the likes of Rupert Murdoch and Barry Diller, reports Forbes.

Malone is capitalizing on AT&T’s misguided media dalliance and is poised to become a prominent shareholder and board member of a newly formed business that combines AT&T’s WarnerMedia’s collection of film, TV, sports and news assets with Discovery Inc.’s unscripted shows and global sports holdings. While the transaction is an about-face for AT&T CEO John Stankey, who vowed to create a media powerhouse out of the telecommunications giant, it marks the latest in a string of content deals for Malone, who holds 28% voting control of Discovery.

John Malone

Malone spoke every day with David Zaslav as the Discovery chief executive laid plans for the ambitious deal. As with many a business arrangement, this one germinated on the links. Zaslav and Stankey planned to meet at the AT&T Pebble Beach Pro-Am golf tournament in February. The pandemic scuttled those travel plans, and a house-bound Zaslav began texting Stankey in what “ended up in a two hour conversation about the future of media.” That led to a series of discrete meetings at Zaslav’s Greenwich Village brownstone — “an exhilarating and a truly bonding experience” — that culminated in today’s agreement.

“John [Malone] sees the opportunity to make one last killing,” said one executive who has worked closely with the cable mogul. “Look, you put the two of them in front of a business chessboard, which John are you going to put your money on—Stankey or Malone?”

AT&T’s investors welcomed the arrival of Malone, whose net worth Forbes estimates at $8Billion—and Zaslav, a media veteran who took Discovery public in 2008, led its acquisition of Scripps Network Interactive and will be the CEO of the combined business. The telecom company’s stock rose 74 cents to $32.95 in late morning trading.

Now, at 80, Malone has a seat at the table with what could be one of the most formidable media companies on the planet. The $43 billion deal brings together AT&T’s Warner Bros. studio, HBO, CNN and TBS and Discovery’s array of cable channels, including HGTV, Food Network and the Discovery Channel. Together it represents a broad collection of scripted and reality shows that represents projected sales of $52 billion this year, sandwiching it between streaming colossus Netflix and the world’s leading entertainment company Walt Disney, which brought in $65.4 billion last year.

“John Malone, in the very early days was there to build CNN with Ted Turner, and so there's a tremendous amount of pride, as someone who started in this business 30 years ago. CNN was the beacon,” said Zaslav. “It's the beacon today, and it should be the beacon everywhere in the world so we're going to come in and we're going to be supportive.”