Investment banks earned more than $ 320 million from the sale of AT & T’s WarnerMedia to Discovery, just five years after many of the same advisers made huge fees from the sale of the media group to the American telecommunications company.
AT&T agreed earlier this year to turn off WarnerMedia with rival Discovery and merge at a significantly lower price than it paid to acquire the entertainment group in 2016.
New York-based boutique bank Allen & Co received $ 75 million for its services to Discovery, while bankers at JPMorgan earned $ 15 million for advisory work and a further $ 140 million for financing services, according to Discovery’s proxy statement.
WarnerMedia’s advisers include Goldman Sachs, which received $ 47.8 million, and merchant bank LionTree, which, according to Refinitiv estimates, earned $ 43.1 million.
Five years earlier, bankers, including those at Allen & Co and JPMorgan, had earned $ 234 million after AT&T agreed to buy WarnerMedia – then called TimeWarner – for $ 85 billion, according to Refinitiv.
Allen & Co, a non-website advertising firm, received $ 50 million for advice to WarnerMedia on the sale to AT&T while Citigroup and Morgan Stanley raised $ 50 million and $ 40 million respectively. JPMorgan, Perella Weinberg Partners and Bank of America each made $ 31.2 million from advisory services to AT&T.
AT & T’s senior executives receive $ 9 million bonus for the acquisition now selected.
Wall Street banks have record fee income of more than $ 100 billion of advice on mergers and acquisitions thanks to a surge in transactions, which for the first time crossed the $ 5tn mark.
Media transactions have been one of the biggest drivers of the boom, as companies rush to compete with streaming services like Netflix. Earlier this year, Amazon bought MGM, the film studio behind James Bond, for $ 8.5 billion.
AT & T’s agreement with Discovery, which creates a company with an enterprise value of $ 132 billion, highlights the speed with which traditional media groups are racing to compete in the power wars. The fees generated by investment banks emphasize the lucrative rewards offered for compiling and pulling out transactions for clients.
The deal, led by AT & T’s CEO John Stankey and Discovery’s David Zaslav, will combine Discovery’s catalogs, ranging from nature to history, with valued media assets, including the Warner Bros. studios, the HBO network behind TV series. Follow-up, and cable television channels including CNN.
JPMorgan, Goldman Sachs and LionTree declined to comment. Allen & Co has no media contact details.