ECONOMIC SILUET: Name the newest streaming giant

Senin, 17 Mei 2021

Name the newest streaming giant

MON, MAY 17, 2021

YOUR AFTERNOON NEWS UPDATE AND MARKET ACTION FROM CNBC

AS OF MON, MAY 17, 2021 • 11:23 ET

DJIA		34251.50
		-0.38%	-130.63

S&P 500		4156.17
		-0.42%	-17.68

NASDAQ		13342.74
		-0.65%	-87.24

EDITOR'S NOTE

Here's a fun one this morning: AT&T shedding its media assets into a new company it's forming with Discovery in order to go back to being a wireless pure-play.

Frankly, there are so many deals that leave you scratching your head that it's nice to see one come along that seems to make a lot of sense. And yes, it's a rapid about-face from AT&T, which fought tooth-and-nail (and cost shareholders more than $100 billion, including debt) to buy Time Warner just a couple of years ago. But you have to credit AT&T for doing it anyway.

David Faber interviewed both AT&T CEO John Stankey and David Zaslav, the Discovery CEO who will become the leader of the new joint venture, this morning. Their vision is grand, and it has to be in order to compete with Netflix, Disney+, Amazon Prime and all the other players in the streaming wars. But Zaslav thinks the combined company, which will own assets ranging from CNN to HBO to HGTV and Eurosport, could eventually have anywhere from 200 million to 400 million subscribers.

There's not even a name for the new company yet (AT&D?), which will be about 70% owned by AT&T, and it's not clear whether all these assets will be offered in one combined streaming service or across a few different existing ones. But shareholders of both companies seemed to like it--although AT&T has halved its gains and is currently up about 2%, and Discovery has turned negative.

And sure, plenty of challenges remain, from both companies' debt loads to AT&T's "resized" dividend to the simple fact of the new company going up against the likes of Netflix, Disney, Amazon, and Apple in the streaming wars. But Mr. Stankey insists this will let AT&T invest cash for a better shareholder return (not to mention existing shareholders will have a sizeable stake in the new company), and Mr. Zaslav told David the new company will be "a free cash flow machine."

The name for the new company will be announced in the next several days, Mr. Zaslav said. But whatever they call it, it's a formidable new player in the market.

More at 1 p.m! See you then...

Kelly

Kelly Evans
Twitter: @KellyCNBC

Instagram: @realkellyevans

KEY STORIES

AT&T announces $43 billion deal to merge WarnerMedia with Discovery

If approved by regulators, the deal effectively reverses AT&T's years-long plan to combine content and distribution in a vertically integrated company.

Stocks making the biggest moves in the premarket: AT&T, Discovery, ViacomCBS, MicroStrategy & more

The stocks making the biggest moves in premarket trading include AT&T, Discovery, ViacomCBS, MicroStrategy, and more.

Millionaires who favor raising taxes on the rich launch protests in front of Amazon CEO Jeff Bezos' home on Tax Day

Mobile billboards will also make appearances in front of Sen. Mitch McConnell's D.C. residence and Sen. Chuck Schumer's office in New York City.

64% of millennials have regrets about buying their current home—here's why

Nearly two-thirds of millennials say they have at least one regret about purchasing their current home, according to a new poll from Bankrate.

Supreme Court to hear Mississippi abortion case challenging Roe v. Wade

The Supreme Court on Monday agreed to hear arguments in a major abortion case from Mississippi.

Target, Starbucks and other retailers ease mask mandates for fully vaccinated customers

Target and Starbucks on Monday joined a growing list of retailers and restaurants that will ease mask requirements for fully vaccinated customers.

Dr. Scott Gottlieb says 'nobody is going to be wearing' Covid masks by June

Former FDA chief Dr. Scott Gottlieb told CNBC on Monday he expects by next month the prevalence of Covid is going to be "sufficiently low in this country."