AT&T, Discovery join media brands as cord-cutters encroach

“AT&T’s balance sheet allowed neither the aggressive investment required for HBO Max nor the 5G wireless push (nor, for that matter, for the consumer fiber business). Ultimately, they had no choice,” wrote MoffettNathanson analyst Craig Moffett.

Industry analysts say the need to succeed in both became too much.

“When they acquired Time Warner, the vision was to have this kind of mega company that will have a seamless backbone between the content side and the broadband side,” added CFRA analyst Tuna Amobi . “That vision clearly has not panned out.”

AT&T has a massive debt load, and needs to invest more money as it builds out next-generation 5G wireless networks —wireless is its core business. It said Monday that it plans to increase capital investments for 5G and fiber internet.

The new company will be in direct competition with Netflix, Amazon, Apple, Disney and Comcast, which are assembling a growing arsenal of original media content.

The new company will be able to cut costs by $3 billion annually, the companies said, money that could go toward original streaming content. It will house almost 200,000 hours of programming and bring together more than 100 brands under one global portfolio, including: DC Comics, Cartoon Network, Eurosport, Magnolia, TLC and Animal Planet.