CMCSABrian Roberts, Chairman and CEO of ComcastDavid A. Grogan | CNBC
Shares of Comcast closed down 5.5% Monday after AT&T announced a deal to combine its content unit WarnerMedia with Discovery to form a new media giant.
The new media company, which could be worth well over $100 billion, will compete against other players that have invested heavily in streaming, including Comcast’s NBCUniversal, Netflix and Disney. Netflix stock closed down nearly 1%, while Disney shed more than 2%.
Executives said the two companies already spend a combined $20 billion per year on content, including programming for their linear networks, which is comparable to Netflix’s projected estimate of $17 billion spent this year.
The deal also could put pressure on Comcast’s internet business. By shedding its media assets, AT&T can focus on its core connectivity business, touting the power of 5G. AT&T Chief Executive John Stankey said in a call with reporters Monday that he plans to focus his company’s capital on fiber infrastructure to improve AT&T’s 5G network, which could compete against Comcast as a home broadband alternative.
“Connectivity demand is higher than ever,” an AT&T spokesperson told CNBC earlier Monday. “Especially connectivity with symmetrical upload and download speeds. This transaction allows us
