Discovery’s merger with WarnerMedia could take effect as early as Friday

By Oliver Darcy and Brian Stelter, CNN Business

A version of this article first appeared in the “Reliable Sources” newsletter. You can sign up for free right here.

The formation of Warner Bros. Discovery is just about complete.

As Variety’s Jennifer Maas first reported on Tuesday, the pending merger between Discovery and WarnerMedia could “close,” in Wall Street parlance, as early as the end of business Friday. (WarnerMedia is CNN’s current parent, and CNN will be a part of this new media juggernaut.) A person familiar with the matter confirmed to Brian Stelter and me that the Friday timing is possible.

The companies have been planning for this moment for the better part of a year. In recent weeks, Monday the 11th was tentatively marked as a closing date. Now it could be a few days earlier.

Discovery and AT&T are not publicly commenting. But there are many signs that the deal is quickly coming to completion, with David Zaslav in charge of the enterprise. On Tuesday, AT&T officially began its process to spin off WarnerMedia, executing a stock dividend that will give shareholders some shares in the new company. AT&T shareholders will control 71% of Warner Bros. Discovery. “This is going to be the most exciting story in the sector for the next few years,” high-profile industry analyst Jessica Reif told Yahoo Finance.

The spin-off was accompanied by WarnerMedia CEO Jason Kilar formally announcing that he will depart the company on Friday. “With the pending transaction with Discovery nearing close, now is the right time to share with each of you that I will be departing this amazing company,” Kilar told employees in a memo on Tuesday.

In his note, Kilar called leading WarnerMedia “the honor of my lifetime.” Some of his key lieutenants are also leaving, making way for Discovery.

Kilar’s lasting imprint on Warner

In his tenure as CEO, Kilar brought a new streaming-era mentality to a set of businesses — including HBO and CNN — that were historically siloed and focused on cable and satellite relationships. We talked about it last week when he was hanging out with the tech team running the CNN+ launch. The three keys in this new world, he said, are customer acquisition, engagement, and retention — hooking subscribers, keeping subscribers coming back for fresh and compelling content, and giving them reasons not to cancel. I know that sounds like common sense to some, but it requires a major mindset shift for traditional media businesses.

Speaking on CNBC, Kilar said his counsel to the leaders of Warner Bros. Discovery would be to “start and end with storytelling and stick to that knitting, and also recognize what’s working really well, which is clearly the streaming side of the business and gaming side of the business.” Kilar said he had no “grand proclamations” to share about his own future, but said, “I’m not going to a beach to go and reflect or retire…”

Sarnoff and Forssell also set to exit

“The end credits are rolling for the senior leadership of WarnerMedia,” the WSJ’s Joe Flint wrote Tuesday.

Warner Bros. CEO Ann Sarnoff, who has led the studio since 2019, is set to leave at the same time as Kilar, the NYT’s Brooks Barnes reported, citing three sources and saying a formal announcement is coming soon. Like Kilar, he wrote, Sarnoff “found herself without a seat in the game of musical chairs that accompanies the merging of competing companies.” While the new structure “is still unknown,” Zaslav is expected to take over “at least some” of her portfolio.

HBO Max chief Andy Forssell is also parting ways with the company, Variety’s Matt Donnelly and Jennifer Maas scooped. As Deadline’s Anthony D’Alessandro and Dade Hayes reported, Discovery streaming head JB Perrette was “widely speculated to be taking over the newly merged company’s combined direct-to-consumer streaming operation even before Forssell’s exit became official.” All that said, HBO content chief Casey Bloys is expected to stay, D’Alessandro and Hayes reported…

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