A “rendezvous with destiny” was how the Warner Bros.–Discovery merger was described by its CEO back in 2022. In a $43 billion deal between the media giant and the much smaller television company, the move was designed to unite two entertainment businesses to maximize their strengths and be better positioned to compete with the streaming giants in this highly competitive space.
But not all marriages are set to last—which has been the case with many Warner Bros. marriages. Three years on, Warner Bros. Discovery is splitting up: Its streaming and studio capabilities, including HBO and Warner Brother’s production, will be more focused to compete with streaming services such as Netflix, and its legacy TV network business, including CNN and Discovery, will become a separate entity, housing the bulk of the group’s $37 billion debt and potential further decline.
At its heart, the proposed split is an admission that WBD’s previous M&A strategy, while ambitious, failed to deliver a compelling, unified brand story and experience. The union of WarnerMedia and Discovery promised operational synergies and streaming dominance; instead, it delivered a confused portfolio hampered by billions in debt and a deeply diluted brand experience.
This is not the first split we’ve seen in the industry lately, as Comcast recently decided to spin off part of its business and create the Versant brand. That said, WBD has had a different approach than Comcast: Versant will house many of the networks, but Comcast has decided to retain several of them, including NBC, Bravo, and Telemundo. WBD is making a clearer split, separating its networks into one company and studios and streaming into another.
What could life look like for the new brands post-breakup, after spending years trying to make the merger work? Splitting them with clear focus is likely the wise move, looking at the media landscape and its movement over the last decade. It’s no secret that streaming services are booming and the networks need innovation and reinvention. In the case of WBD, its streaming platforms ended the first quarter of this year strong with more than 122 million subscribers.
