WarnerMedia: Kinney Funeral Homes, the $183B AOL Deal and AT&T's Exit

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The company most recently known as WarnerMedia began far from Hollywood. In the 1960s Kinney National Services ran parking lots, office cleaning and funeral homes, a conglomerate built on countercyclical cash flow. Steve Ross used that money to buy the struggling Warner Bros.-Seven Arts studio in 1969, and by 1972 the company spun off its service businesses and renamed itself Warner Communications Inc. Under Ross it bought DC Comics, built Warner Cable, formed a joint venture with American Express that launched MTV and Nickelodeon, and acquired Atari in 1976, only to nearly go bankrupt when the video game market crashed in 1983. In 1990 it merged with Time Inc., but a $12.2 billion hostile bid from Paramount forced Time to restructure the deal as a cash acquisition and load the new Time Warner with debt.

The 1996 purchase of Turner Broadcasting brought CNN, Cartoon Network, New Line Cinema and Castle Rock under one roof. Then in 2000 AOL announced a $183 billion merger in which AOL shareholders controlled 55 percent of the combined company. By 2002 AOL Time Warner reported a $99 billion loss, the largest annual corporate loss on record, and in 2003 it dropped AOL from its name. Over the next 15 years it sold Warner Music, its book division, Time Warner Cable and Time Inc. until only HBO, Warner Bros. and Turner remained. AT&T bought the company for $85.4 billion in 2016, beat a Department of Justice suit against the vertical merger, renamed it WarnerMedia in 2018, launched HBO Max in 2020, and in 2021 spun it into a $43 billion deal with Discovery that created Warner Bros. Discovery in April 2022.

• Warner Bros. had once sold its pre-1950 film library, so buying Turner meant paying billions to regain access to its own classic movies.
• Time Warner bought the Six Flags parks in the early 1990s, filled them with Looney Tunes and DC characters, and sold them by 1998.
• HBO became the first digitally transmitted TV service in 1993, and Warner Bros. led the rollout of the DVD in 1996.
• Jeff Bewkes later called the AOL merger the biggest mistake in corporate history.
• Rupert Murdoch offered $80 billion for Time Warner in 2014, and the board rejected it.