The investment bank made a net profit of more than $320 million from the sale of AT&T’s WarnerMedia to Discovery. Just five years ago, many of the same consultants sold the media group to this American telecommunications company for high fees.
Earlier this year, AT&T agreed to split and merge WarnerMedia and its competitor Discovery, at a price significantly lower than the 2016 acquisition price of the entertainment group.
According to Discovery’s power of attorney, New York-based boutique bank Allen & Co received US$75 million for its services for Discovery, while JPMorgan Chase’s bankers received US$15 million through consulting work and another 140 million. U.S. dollars are used for financing services.
According to Refinitiv estimates, WarnerMedia’s advisors include Goldman Sachs, which received US$47.8 million, and the commercial bank LionTree, which received US$43.1 million.
Five years ago, according to Refinitiv data, after AT&T agreed to acquire WarnerMedia (then called Time Warner) for $85 billion, bankers including Allen & Co and JPMorgan Chase earned $234 million.
Allen & Co, a public relations company without a website, received US$50 million from WarnerMedia to advise on the sale of AT&T, while Citigroup and Morgan Stanley received US$50 million and US$40 million respectively. JPMorgan Chase, Perella Weinberg Partners and Bank of America each earned $31.2 million from AT&T’s advisory services.
AT&T’s senior executives received a $9 million bonus for this acquisition, but they have not yet been selected.
As the transaction boom surpassed the US$5 trillion mark for the first time, Wall Street Bank received record fee income of more than US$100 billion from M&A advisory this year.
As companies race to compete with streaming services such as Netflix, media transactions have been one of the biggest drivers of prosperity. Earlier this year, Amazon bought MGM, the film studio behind James Bond, for $8.5 billion.
The AT&T and Discovery transaction created a company with an enterprise value of $132 billion, highlighting the speed at which traditional media groups are eager to compete in the streaming war. The fees incurred by investment banks underscore the generous returns provided for customers to sort and split exchanges.
The deal, led by AT&T CEO John Stankey and Discovery Channel’s David Zaslav, will combine Discovery Channel’s catalog (from nature to history) with precious media assets, including Warner Bros. Studios and TV series behind HBO network successionAnd cable channels, including CNN.
JPMorgan Chase, Goldman Sachs and LionTree declined to comment. Allen & Co does not have media contact information.