Winners & losers in Discovery's marriage with AT&T's WarnerMedia

In what could easily be the year’s biggest media deal, AT&T announced it will spin off its WarnerMedia assets and combine them with Discovery in a blockbuster $43 billion tie-up that’s shaking up the entertainment industry.  

The new company – which has yet to be named, – will bring some of the most iconic names in television together including CNN, HBO, TNT, Animal Planet and the Food Network under one brand that will distribute content both on cable and on streaming platforms.

Yet, as the dust settles on one of the most transformational media mergers in history, clear winners and losers are emerging. 

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First and most obviously, AT&T’s shareholders are coming out on top as they now own a 71% stake in the new company and will still receive a decent dividend – albeit a smaller one – since the spinoff resizes AT&T to its core telecom businesses. Shares of AT&T popped as much as 5% on the news, as investors applauded a company now with less debt so that CEO John Stankey can focus on emerging 5G wireless networks for growth as well as cut $3 billion in "cost synergies" which often means job cuts. After the early pop, shares of AT&T faltered in midday trading and were down 2.7% at the closing bell. 

Ticker	Security	Last	Change	Change %
T	AT&T INC.	16.59	-0.23	-1.34%
DISCA	n.a.	n.a.	n.a.	n.a.
DISCB	n.a.	n.a.	n.a.	n.a.

Perhaps the biggest winner is the man at the center of the new company: David Zaslav, the longtime Discovery CEO, who has been tapped to run the enterprise despite the economics of the deal which favors AT&T. Zaslav, who has been instrumental in the success of Discovery including the company’s takeover of the Scripps Networks in 2018, will be tasked with creating a streaming entity to compete with the likes of Disney+ and Netflix. 

Heading a media conglomerate is no small task and Zaslav will have to tap seasoned executives to help him run the new operations. One name that’s being whispered is Richard Plepler, the former HBO chief who was pushed out by Stankey in 2019. Rumor has it that Plepler, a longtime friend of Zaslav and the man behind blockbuster shows like "Game of Thrones," could return to the new combined company in some executive capacity, possibly to be Zaslav’s second-in-command, sources tell FOX Business's Liz Claman.  

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Another winner is Jeff Zucker, the current head of CNN, whose tenure could be extended past the date of his current contract which is up at the end of 2021. Zucker has strong ties to Zaslav from their days working together at NBC and the two are frequent golfing buddies. He was said to be looking for a new post-CNN gig, but Zucker will likely stay on at the cable news channel, if asked, people close to him tell FOX Business.  

The investment bankers at JPMorgan have also emerged as unlikely winners in the tie-up. The bank closely advised both Zaslav and Discovery during the merger talks that made the CEO of the acquired company the executive in charge of the new company.

The losers list begins with the man who is currently running WarnerMedia, Jason Kilar, recently heralded in a Wall Street Journal profile as a power-player at AT&T now that it has fully integrated its $82 billion purchase of TimeWarner (now called WarnerMedia). With Zaslav in charge, and that mega-deal unwound, people with direct knowledge of the matter tell FOX Business it is likely Kilar will leave in the coming weeks or months. 

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Another executive with ties to AT&T – former CEO Randall Stephenson – is also on the losing end of the deal. Stephenson is responsible for engineering AT&T s Time Warner gamble as well as another deal disaster: The 2015 purchase of DirectTV for $49 billion. Before the Warner Media spinoff, AT&T was forced to unload DirecTV for a mere $16 billion. Stephenson, who retired as AT&T chairman last year, now owns both debacles including the copious amounts of time and money fighting the Trump Justice Department, which unsuccessfully sought to block the Time Warner acquisition. 

Finally, current AT&T CEO John Stankey could be a potential long-term loser in this narrative. Stankey, who took over as CEO from Stephenson, also played a major part in the AT&T-Time Warner and DirecTV deals. He can now focus his attention on AT&T's core businesses, but investors will want to see results, and he won't be afforded another deal mistake.  

AT&T and Discovery did not respond to our request for comment for this story.