Warner Bros. Games will be broken up as owner AT&T unloads its media business in a sale/merger with Discovery.
On Monday, telecommunications giant AT&T said it had agreed a deal to offload WB Games parent WarnerMedia, which will merge with Discovery to form a new standalone company billed as “one of the largest global streaming players”.
The transaction, which is anticipated to close in mid-2022, will see AT&T receive $43 billion and its shareholders receive stock representing 71% of the new company.
Warner’s games division comprises 11 studios: Rocksteady (Batman Arkham, Suicide Squad), NetherRealm (Mortal Kombat), Monolith (Middle-earth games Shadow of Mordor/War), TT Games (Lego games), Avalanche Software (Hogwarts Legacy), WB Games Montréal (Gotham Knights), WB Games Boston (Game of Thrones: Conquest), WB Games Los Angeles, WB Games San Francisco, WB Games San Diego, and WB Games New York.
While WB Games wasn’t mentioned in Monday’s announcement, a spokesperson told Axios the deal will see it broken up in some form.
“Some of the gaming arm will stay with AT&T and some will go with the new company,” they said.
It was said to be hoping to generate around $4 billion from a potential sale to pay off some of its substantial debt, before changing its mind and taking the business off the market.
AT&T and Discovery said on Monday: “The new company will compete globally in the fast-growing direct-to-consumer business – bringing compelling content to DTC subscribers across its portfolio, including HBO Max and the recently launched discovery+.
“The transaction will combine WarnerMedia’s storied content library of popular and valuable IP with Discovery’s global footprint, trove of local-language content and deep regional expertise across more than 200 countries and territories.
“The new company will be able to invest in more original content for its streaming services, enhance the programming options across its global linear pay TV and broadcast channels, and offer more innovative video experiences and consumer choices.”