S-4

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

S-4 1 d249842ds4.htm S-4 S-4

As filed with the Securities and Exchange Commission on November 18, 2021

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

DISCOVERY, INC.

(Exact name of registrant as specified in its charter)

Delaware

(State of Incorporation)

4841

(Primary Standard Industrial
Classification Code Number)

35-2333914

(I.R.S. Employer
Identification No.)

230 Park Avenue South

New York, New York 10003

(212) 548-5555

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Savalle Sims, Esq.

Executive Vice President and General Counsel

Discovery, Inc.

230 Park Avenue South

New York, New York 10003

(212) 548-5555

(Name, address, including zip code, and telephone number, including area code, of agent for service)

With a copy to:

Matthew E. Kaplan, Esq.
Jonathan E. Levitsky, Esq.

Sue Meng, Esq.

Jeffrey J. Rosen, Esq.

Debevoise & Plimpton LLP
919 Third Avenue
New York, New York 10022
(212) 909-6000

Stacey S. Maris, Esq.

Senior Vice President,

Deputy General Counsel and Secretary

AT&T Inc.

One AT&T Plaza

208 South Akard Street

Dallas, Texas 75202

(210) 821-4105

Eric M. Krautheimer, Esq.

Patrick S. Brown, Esq.

Melissa Sawyer, Esq.

Sullivan & Cromwell LLP
125 Broad St.

New York, New York 10004

(212) 558-4000

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement is declared effective and all other conditions to the transactions contemplated by the Agreement and Plan of Merger, dated as of May 17, 2021, described in the enclosed proxy statement/prospectus have been satisfied or waived.

If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐

CALCULATION OF REGISTRATION FEE



Title of each class of securities to be registered	Amount to be registered	Proposed maximum offering price per unit	Proposed maximum aggregate offering price	Amount of registration fee
Series A common stock, par value $0.01 per share	1,702,536,808⁽¹⁾	N/A	$47,262,421,770.91⁽²⁾	$4,381,226.50⁽³⁾
Series A common stock, par value $0.01 per share	695,402,358⁽⁴⁾	N/A	$16,655,875,542.62⁽⁵⁾	$1,543,999.66⁽³⁾
Total			$63,918,297,313.53	$5,925,226.16

(1)

Represents the maximum number of shares of Series A common stock of Warner Bros. Discovery, Inc. (the combined company), par value $0.01 per share (“WBD common stock”), estimated to be issuable to holders of Magallanes, Inc. (“Spinco”) common stock upon completion of the transactions contemplated by the Agreement and Plan of Merger, dated as of May 17, 2021 (the “Merger Agreement”), described in the enclosed proxy statement/prospectus. Pursuant to Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”), this Registration Statement also covers an indeterminate number of additional shares of WBD common stock as may be issuable as a result of stock splits, stock dividends or the like.

(2)

Estimated solely for the purpose of calculating the registration fee required by Section 6(b) of the Securities Act and computed pursuant to Rule 457(c) and Rule 457(f) under the Securities Act based on $27.76, the average of the high and low prices of shares of Series A common stock of Discovery, Inc., par value $0.01 per share (“Discovery Series A common stock”), as reported on the Nasdaq Global Select Market (“Nasdaq”) on November 16, 2021.

(3)	Calculated pursuant to Section 6(b) of the Securities Act and SEC Fee Advisory #1 for Fiscal Year 2022 at a rate equal to $92.70 per $1.0 million of the proposed maximum aggregate offering price.

(4)

Represents the maximum number of shares of WBD common stock estimated to be issuable to holders of Discovery, Inc.’s stock, which will be reclassified and automatically converted into shares of WBD common stock in connection with the completion of the transactions contemplated by the Merger Agreement (the “Reclassification”). The number of shares of WBD common stock being registered is based on the sum of (a) 169,259,793 shares of Discovery Series A common stock that will each be reclassified and converted into one share of WBD common stock in the Reclassification, (b) 6,512,378 shares of Series B convertible common stock of Discovery, Inc., par value $0.01 per share (“Discovery Series B common stock”), that will each be reclassified and converted into one share of WBD common stock in the Reclassification, (c) 330,146,263 shares of Series C common stock of Discovery, Inc., par value $0.01 per share (“Discovery Series C common stock”), that will each be reclassified and converted into one share of WBD common stock in the Reclassification, (d) 7,852,583 shares of Series A-1 convertible participating preferred stock of Discovery, Inc., par value $0.01 per share (“Discovery Series A-1 preferred stock”), that will each be reclassified and converted into 13.11346315 shares of WBD common stock in the Reclassification and (e) 4,313,350 shares of Series C-1 convertible participating preferred stock of Discovery, Inc., par value $0.01 per share (“Discovery Series C-1 preferred stock”), that will each be reclassified and converted into 19.3648 shares of WBD common stock in the Reclassification, each issued and outstanding as of the close of business on November 12, 2021, and 2,951,572 additional shares of Discovery Series A common stock and 30,651 additional shares of Discovery Series C common stock estimated to be issuable in connection with Discovery, Inc. equity-based awards prior to the completion of the transactions contemplated by the Merger Agreement, which will each be reclassified and converted into one share of WBD common stock in the Reclassification.

(5)

Estimated solely for the purpose of calculating the registration fee required by Section 6(b) of the Securities Act and computed pursuant to Rule 457(c) and Rule 457(f) under the Securities Act based on the sum of (a) the product of 172,211,365 shares of Discovery Series A common stock and $27.76, the average of the high and low prices of shares of Discovery Series A common stock as reported on Nasdaq on November 16, 2021, (b) the product of 6,512,378 shares of Discovery Series B common stock and $42.87, the average of the high and low prices of shares of Discovery Series B common stock as reported on Nasdaq on November 16, 2021, (c) the product of 330,176,914 shares of Discovery Series C common stock and $26.91, the average of the high and low prices of shares of Discovery Series C common stock as reported on Nasdaq on November 16, 2021, (d) the product of 7,852,583 shares of Discovery Series A-1 preferred stock and $158.33, the book value of each share of Discovery Series A-1 preferred stock as of September 30, 2021, and (e) the product of 4,313,350 shares of Discovery Series C-1 preferred stock and $340.67, the book value of each share of Discovery Series C-1 preferred stock as of September 30, 2021. Because there is no trading market for the Discovery Series A-1 preferred stock and the Discovery C-1 preferred stock, their values were based on their respective book values as of September 30, 2021.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

EXPLANATORY NOTE

Discovery, Inc. (“Discovery”), to be renamed Warner Bros. Discovery, Inc. (“WBD”) in connection with the completion of the transactions described herein, is filing this registration statement on Form S-4 (Reg. No. 333- ) to register the shares of Series A common stock of WBD, par value $0.01 per share (“WBD common stock”), that will be issued in the merger of Drake Subsidiary, Inc., a Delaware corporation (“Merger Sub”), which is a direct, wholly owned subsidiary of Discovery, with and into Magallanes, Inc., a Delaware corporation (“Spinco”), which is currently a wholly owned subsidiary of AT&T Inc., a Delaware corporation (“AT&T”), whereby the separate corporate existence of Merger Sub will cease and Spinco will continue as the surviving company and a wholly owned subsidiary of WBD (the “Merger”). Discovery is also filing this registration statement to register the shares of WBD common stock that will be issued upon the reclassification and conversion of Discovery capital stock existing immediately prior to the Merger into such number of shares of WBD common stock as set forth in the Merger Agreement (as defined herein).

Prior to the Merger, subject to the terms of the Separation Agreement (as defined herein), AT&T will transfer certain assets, liabilities and entities composing the WarnerMedia business of AT&T (such business to be transferred, the “WarnerMedia Business”) to Spinco or its subsidiaries. In exchange therefor, AT&T will receive shares of Spinco common stock, par value $0.01 per share (“Spinco common stock”), as well as the Special Cash Payment (as defined herein) and, in addition, the Additional Amount (as defined herein), which is expected to include Spinco Debt Securities (as defined herein), and the shares of Spinco common stock will be distributed to AT&T stockholders as provided below. As a result of the Merger, the existing shares of Spinco common stock will automatically convert into the right to receive shares of WBD common stock.

Spinco is a newly formed, wholly owned subsidiary of AT&T that was organized specifically for the purpose of effecting the Separation (as defined herein). Spinco has engaged in no business activities to date and it has no material assets or liabilities of any kind, other than those incident to its formation and those incurred in connection with the Transactions (as defined herein). The shares of Spinco common stock will be immediately converted into shares of WBD common stock upon completion of the Merger. Discovery will file the enclosed proxy statement/prospectus that relates to the special meeting of Discovery stockholders to approve the reclassification and issuance of WBD common stock pursuant to the Merger Agreement. In addition, Spinco is filing a registration statement on Form S-4 and Form S-1 (Reg. No. 333- ) to register the issuance of shares of Spinco common stock to be distributed to AT&T stockholders.

AT&T announced on May 17, 2021 that its board of directors (“AT&T Board”) had approved the separation of Spinco. Based on market conditions prior to the closing of the Merger, AT&T will determine whether the shares of Spinco common stock will be distributed to AT&T stockholders in a pro rata distribution or an exchange offer and if conducted as an exchange offer, the terms thereof (including whether to offer any discount for shares of Spinco common stock). Discovery and Spinco are filing their registration statements (including this registration statement) under the assumption that the distribution of Spinco common stock will occur through an exchange offer where AT&T will offer to its stockholders the option to exchange all or a portion of their shares of AT&T common shares, par value $1.00 per share (“AT&T common stock”), for shares of Spinco common stock, which would automatically convert into shares of WBD common stock in the Merger (the “Exchange Offer”). As a result, there would be a reduction in the issued and outstanding shares of AT&T common stock. If the Exchange Offer is not fully subscribed because the number of shares of AT&T common stock tendered and accepted in the Exchange Offer results in fewer than all of the shares of Spinco common stock being exchanged, then AT&T would distribute the remaining shares of Spinco common stock owned by AT&T on a pro rata basis to AT&T stockholders as of the Distribution record date (as defined herein), subject to the fact that such stockholders will have waived their rights to receive shares in such distribution with respect to any shares of AT&T common stock tendered and accepted in the Exchange Offer (a “Clean-Up Spin-Off”). AT&T stockholders whose shares are accepted in the Exchange Offer will waive their rights to receive shares of Spinco common stock in a Clean-Up Spin-Off with respect to those shares tendered in the Exchange Offer. However, AT&T may elect to effect the distribution of Spinco common stock by way of a pro rata distribution instead of the Exchange Offer if it determines that doing so would be in the best interests of AT&T and its stockholders based on market conditions prior to the closing of the Merger. In a pro rata distribution, all AT&T stockholders would receive a pro rata number of shares of Spinco common stock. No final decision has been made about the form of distribution or the final terms of any exchange offer (including whether to offer any discount for shares of Spinco common stock). Once a final decision is made regarding the manner of distribution of the shares of Spinco common stock, this registration statement on Form S-4 and Spinco’s registration statement on Form S-4 and Form S-1 will be amended to reflect that decision, if necessary. It is not expected that AT&T’s decision to effect the distribution of the shares of Spinco common stock solely through a pro rata distribution instead of through the Exchange Offer and a potential Clean-Up Spin-Off would have a material impact on WBD or on Discovery stockholders.

The information in this proxy statement/prospectus is not complete and may be changed. The securities offered by this proxy statement/prospectus may not be sold until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This proxy statement/prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction where an offer, solicitation or sale is not permitted.

PRELIMINARY—SUBJECT TO COMPLETION, DATED NOVEMBER 18, 2021

PROXY STATEMENT/PROSPECTUS

TO DISCOVERY STOCKHOLDERS

YOUR VOTE IS VERY IMPORTANT

Dear Stockholders:

As previously announced, on May 17, 2021, Discovery, Inc. (“Discovery”), to be renamed Warner Bros. Discovery, Inc. (“WBD”) in connection with the completion of the transactions described herein, and Drake Subsidiary, Inc., a Delaware corporation and a wholly owned subsidiary of Discovery (“Merger Sub”), entered into definitive agreements with AT&T Inc., a Delaware corporation (“AT&T”), and Magallanes, Inc., a Delaware corporation and a wholly owned subsidiary of AT&T (“Spinco”), pursuant to which AT&T will transfer certain assets, liabilities and entities composing the WarnerMedia business of AT&T (such business to be transferred, the “WarnerMedia Business”) to Spinco or its subsidiaries and distribute to its stockholders the issued and outstanding shares of common stock of Spinco (“Spinco common stock”) held by AT&T (the “Distribution”). Following the Distribution, Merger Sub will merge with and into Spinco, with Spinco continuing as the surviving corporation and a wholly owned subsidiary of WBD (the “Merger”).

The principal transactions described in this proxy statement/prospectus include the following:

•

Separation—AT&T and certain AT&T subsidiaries will engage in a series of transactions in order to separate the WarnerMedia Business from AT&T’s other businesses pursuant to which (1) certain assets and liabilities constituting the WarnerMedia Business will be transferred pursuant to a separation plan to Spinco and (2) certain excluded assets and liabilities will be transferred to AT&T or other non-Spinco subsidiaries of AT&T (the “Separation”).

•

Special Cash Payment and Issuance of Spinco Debt Securities—Spinco will make a cash distribution to AT&T equal to approximately $30.0 billion, subject to adjustment, including for the approximately $1.6 billion of existing debt of the WarnerMedia Business to be assumed by the Spinco Group (as defined herein), net working capital and other adjustments (the “Special Cash Payment”). See “The Separation Agreement—The Separation—Special Cash Payment, Payment of the Additional Amount and Post-Closing Adjustments” for further description of adjustments to the Special Cash Payment. In addition, Spinco will make a distribution to AT&T equal to the Additional Amount (as defined herein), which is expected to include debt instruments of Spinco equal to approximately $13.0 billion, subject to adjustment, which AT&T expects to transfer to one or more investment banks in exchange for certain debt obligations of AT&T held by such investment bank(s) as principal for their own account.

•

Distribution—The Distribution will be conducted through, at AT&T’s election, either (1) a pro rata distribution of Spinco common stock to AT&T stockholders or (2) an exchange offer (the “Exchange Offer”) followed by a pro rata distribution of any shares of Spinco common stock remaining if the Exchange Offer is not fully subscribed because the number of shares of AT&T common shares, par value $1.00 per share (“AT&T common stock”), tendered and accepted does not result in all shares of Spinco common stock being distributed in the Exchange Offer (a “Clean-Up Spin-Off”). Based on market conditions prior to the closing of the Merger, AT&T will determine whether the shares of Spinco common stock will be distributed to AT&T stockholders through a pro rata distribution or the Exchange Offer and a potential Clean-Up Spin-Off, if necessary. Discovery and Spinco are filing their registration statements (including this registration statement) under the assumption that the distribution of Spinco common stock will occur through the Exchange Offer.

•

Reclassification—Discovery will amend and restate its restated certificate of incorporation, as amended, to, among other things, change its name to Warner Bros. Discovery, Inc. and reclassify and automatically convert Discovery capital stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of such amendment and restatement into such number of shares of Series A common stock of WBD, par value $0.01 per share (“WBD common stock”), as set forth herein (the “Reclassification”).

•

Merger—Immediately after the Distribution, Merger Sub will merge with and into Spinco, whereby the separate corporate existence of Merger Sub will cease, and Spinco will continue as the surviving company and a wholly owned subsidiary of WBD. As a result of the Merger, the existing shares of Spinco common stock will automatically convert into the right to receive shares of WBD common stock.

Immediately after the completion of the Merger, approximately 71% of the outstanding shares of WBD common stock on a fully diluted basis are expected to be held by holders of Spinco common stock as of immediately prior to the Merger and approximately 29% of the outstanding shares of WBD common stock on a fully diluted basis are expected to be held by holders of Discovery capital stock as of immediately prior to the Reclassification and the Merger (in each case, excluding any overlaps in the pre-Merger AT&T and Discovery stockholder bases). Discovery will use reasonable best efforts to cause the WBD common stock to be authorized for listing on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “WBD.”

Discovery stockholders are cordially invited to attend a special meeting of Discovery stockholders to be held online via live audio webcast at on (the “Discovery special meeting”). For the health and well-being of our stockholders, employees and directors, we have determined that the Discovery special meeting will be held in a virtual meeting format only, with no physical in-person meeting. At the Discovery special meeting, Discovery stockholders will be asked to approve proposals regarding the amendment and restatement of Discovery’s restated certificate of incorporation, as amended, including to give effect to the Reclassification (the “Charter Amendment proposals”), and a proposal regarding the issuance of shares of WBD common stock to Spinco stockholders in the Merger (the “Share Issuance proposal”).

We cannot complete the transactions necessary to combine Discovery and the WarnerMedia Business, including the Merger, unless Discovery stockholders approve the Charter Amendment proposals and the Share Issuance proposal. Your vote is very important, regardless of the number of shares you own. Whether or not you expect to attend the Discovery special meeting, please vote or otherwise submit a proxy to vote your shares as promptly as possible so that your shares may be represented and voted at the Discovery special meeting. If your shares are held in the name of a bank, brokerage firm, nominee or other record holder, please follow the instructions on the voting instruction form furnished to you by such record holder.

In addition, at the Discovery special meeting, Discovery stockholders will be asked to approve, on an advisory (non-binding) basis, certain compensation payments that will or may be paid by Discovery to its named executive officers in connection with the Merger (the “‘Golden Parachute’ Compensation proposal”).

The Discovery board of directors recommends that Discovery stockholders vote “FOR” the Charter Amendment proposals, “FOR” the Share Issuance proposal and “FOR” the “Golden Parachute” Compensation proposal.

The accompanying proxy statement/prospectus provides important information regarding the Discovery special meeting and a detailed description of the definitive agreements, the transactions necessary to combine Discovery and the WarnerMedia Business and the matters to be presented at the Discovery special meeting. We urge you to read the accompanying proxy statement/prospectus (and any documents incorporated by reference into the accompanying proxy statement/prospectus) carefully. Please pay particular attention to “Risk Factors” beginning on page 54 of the accompanying proxy statement/prospectus.

We thank you for your consideration and continued support of Discovery.

By Order of the Discovery Board of Directors,

David M. Zaslav

President and Chief Executive Officer

NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THE TRANSACTIONS

DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS OR THE SECURITIES TO BE ISSUED IN CONNECTION WITH THE TRANSACTIONS OR DETERMINED IF THIS PROXY STATEMENT/PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

This proxy statement/prospectus is dated , , and is first being mailed to Discovery stockholders on or about , .

LOGO

230 PARK AVENUE SOUTH

NEW YORK, NEW YORK 10003

NOTICE OF SPECIAL MEETING OF DISCOVERY STOCKHOLDERS

TO BE HELD ON ,

To Fellow Discovery Stockholders:

NOTICE IS HEREBY GIVEN that a special meeting of stockholders of Discovery (the “Discovery special meeting”), will be held online via live audio webcast at on at Eastern Time. For the health and well-being of our stockholders, employees and directors, we have determined that the Discovery special meeting will be held in a virtual meeting format only, with no physical in-person meeting.

ITEMS OF BUSINESS:

Charter Amendment Proposals. To consider and vote on the following proposals to approve the amendment and restatement of Discovery’s restated certificate of incorporation, as amended:

to reclassify and automatically convert Discovery capital stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of such amendment and restatement into such number of shares of Series A common stock of Warner Bros. Discovery, Inc., par value $0.01 per share (“WBD common stock”), as set forth in the Agreement and Plan of Merger, dated as of May 17, 2021, as it may be amended from time to time (the “Merger Agreement”), by and among Discovery, Merger Sub, AT&T and Spinco (the “Reclassification proposal”);

to increase the authorized shares of WBD common stock to 10,800,000,000 shares (the “Common Stock Authorization proposal”);

to increase the authorized shares of “blank check” preferred stock of WBD, par value $0.01 per share, to 1,200,000,000 shares (the “Preferred Stock Authorization proposal”);

to declassify the WBD board of directors into one class of directors upon the election of directors at WBD’s third annual meeting of stockholders after the completion of the Merger and make certain related changes (the “Declassification proposal”); and

to provide for all other changes in connection with the amendment and restatement of Discovery’s restated certificate of incorporation, as amended, as shown in Annex F to the proxy statement/prospectus (the “Additional Amendments proposal” and collectively with the Reclassification proposal, the Common Stock Authorization proposal, the Preferred Stock Authorization proposal and the Declassification proposal, the “Charter Amendment proposals”);

Share Issuance Proposal. To consider and vote on a proposal to approve the issuance of WBD common stock to Spinco stockholders in the Merger as contemplated by the Merger Agreement (the “Share Issuance proposal”); and

“Golden Parachute” Compensation Proposal. To consider and vote on a proposal to approve, on an advisory (non-binding) basis, the “golden parachute” compensation payments that will or may be paid by Discovery to its named executive officers in connection with the Merger (the “‘Golden Parachute’ Compensation proposal”).

The proxy statement/prospectus, including the annexes, contains further information with respect to the business to be transacted at the Discovery special meeting. We urge you to read the proxy statement/prospectus, including any documents incorporated by reference, and the annexes carefully and in their entirety. Discovery will transact no other business at the Discovery special meeting, except for business properly brought before the Discovery special meeting or any adjournment or postponement thereof. Please refer to the proxy statement/prospectus of which this notice forms a part for further information with respect to the business to be transacted at the Discovery special meeting.

DISCOVERY BOARD OF DIRECTORS’ RECOMMENDATION:

The Discovery board of directors carefully evaluated the Merger and other transactions in consultation with Discovery management and Discovery’s advisors, and, on May 16, 2021, the Discovery board of directors approved the Merger Agreement and other transaction documents and the transactions contemplated thereby, including the Merger, the Charter Amendment proposals and the Share Issuance proposal, and determined that the Merger Agreement and the transactions contemplated thereby are advisable, fair to and in the best interests of Discovery and its stockholders. All members of the Discovery board of directors were in attendance at the meeting, and the Discovery board of directors unanimously recommended that Discovery stockholders vote “FOR” the Charter Amendment proposals and “FOR” the Share Issuance proposal.

In addition, the Discovery board of directors unanimously recommended that Discovery stockholders vote “FOR” the “Golden Parachute” Compensation proposal.

The Discovery board of directors recommends that you vote “FOR” the Charter Amendment proposals, “FOR” the Share Issuance proposal and “FOR” the “Golden Parachute” Compensation proposal.

WHO MAY VOTE:

The Discovery board of directors has fixed the close of business on as the record date for the Discovery special meeting (the “Discovery record date”). Only holders of record of Discovery’s Series A common stock, par value $0.01 per share (“Discovery Series A common stock”), Discovery’s Series B convertible common stock, par value $0.01 per share (“Discovery Series B common stock”), Discovery’s Series A-1 convertible participating preferred stock, par value $0.01 per share (“Discovery Series A-1 preferred stock” and together with the Discovery Series A common stock and Discovery Series B common stock, the “Discovery voting stock”), and Discovery’s Series C-1 convertible participating preferred stock, par value $0.01 per share (“Discovery Series C-1 preferred stock”), as of the Discovery record date are entitled to receive notice of the Discovery special meeting and to vote at the Discovery special meeting or any adjournment or postponement thereof. As of the Discovery record date, there were , , and issued and outstanding shares of Discovery Series A common stock, Discovery Series B common stock, Discovery Series A-1 preferred stock and Discovery Series C-1 preferred stock, respectively. A list of Discovery holders of record entitled to vote at the Discovery special meeting will be available at the executive offices of Discovery at 230 Park Avenue South, New York, New York 10003 at least ten days prior to the Discovery special meeting and will also be available online at for inspection during the entirety of the Discovery special meeting.

VOTE REQUIRED FOR APPROVAL:

Your vote is very important. We cannot complete the transactions necessary to combine Discovery and the WarnerMedia Business, including the Merger, unless Discovery stockholders approve the Charter Amendment proposals and the Share Issuance proposal. If any of these proposals is not approved by the holders of the requisite number of shares of Discovery capital stock, then the transactions will not occur. The approval of the “Golden Parachute” Compensation proposal is not a condition to the obligations of Discovery to complete the transactions.

Assuming a quorum is present, approval of each of the Charter Amendment proposals requires the affirmative vote of (1) at least 75% of the outstanding shares of Discovery Series B common stock, voting as a class, (2) at least a majority of the outstanding shares of Discovery Series A-1 preferred stock, voting as a class, (3) at least a majority of the outstanding shares of Discovery Series C-1 preferred stock, voting as a class, and (4) at least a majority of the combined voting power of the outstanding shares of Discovery voting stock, voting together as a single class, present in person or represented by proxy at the Discovery special meeting and entitled to vote on such proposal.

Assuming a quorum is present, approval of the Share Issuance proposal and approval, on an advisory (non-binding) basis, of the “Golden Parachute” Compensation proposal each requires the affirmative vote of at least a majority of the combined voting power of the outstanding shares of Discovery voting stock, voting together as a single class, present in person or represented by proxy at the Discovery special meeting and entitled to vote on such proposal. Discovery stockholders present virtually during the Discovery special meeting will be considered present in person at the Discovery special meeting.

When the Discovery voting stock votes together as a single class, (1) each holder of Discovery Series A common stock will be entitled to one vote for each share of such stock held on the Discovery record date, (2) each holder of Discovery Series B common stock will be entitled to ten votes for each share of such stock held on the Discovery record date and (3) each holder of Discovery Series A-1 preferred stock on the Discovery record date will be entitled to the number of votes equal to the number of votes such holder would have been entitled to cast had it converted its shares of Discovery Series A-1 preferred stock into shares of Discovery Series A common stock immediately prior to the Discovery record date for each share of such stock held on the Discovery record date.

To ensure your representation at the Discovery special meeting, please complete and return the enclosed proxy card or submit your proxy by telephone or through the internet. Please submit your proxy promptly, whether or not you expect to attend the Discovery special meeting. Submitting a proxy now will not prevent you from being able to vote in person at the Discovery special meeting.

By Order of the Discovery Board of Directors,

Savalle Sims

Executive Vice President and General Counsel

New York, New York

TABLE OF CONTENTS


HELPFUL INFORMATION			1
QUESTIONS AND ANSWERS			5
Questions and Answers about the Transactions			5
Questions and Answers about the Discovery Special Meeting			19
SUMMARY			27
Parties to the Transactions			27
The Transactions			29
Key Terms of the Merger Agreement			32
Debt Financing			34
Other Agreements Related to the Transactions			34
Information about the Discovery Special Meeting			36
Recommendation of the Discovery Board; Discovery’s Reasons for the Transactions			39
Opinions of Discovery’s Financial Advisors			39
AT&T’s Reasons for the Transactions			40
Regulatory Approvals			41
Material U.S. Federal Income Tax Consequences			41
Board of Directors and Management of WBD Following the Transactions			42
Interests of Discovery’s Directors and Executive Officers in the Transactions			43
Effects of the Reclassification on Outstanding Discovery Equity-Based Awards			44
Interests of AT&T’s Directors and Executive Officers in the Transactions			44
Effects of the Distribution and the Merger on Outstanding AT&T Equity-Based Awards			44
Dissenters’ Rights/Rights of Appraisal			45
Summary Risk Factors			45
Accounting Treatment			47
SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION			48
Summary Historical Consolidated Financial Information of Discovery			48
Summary Historical Consolidated Financial Information of AT&T			50
Summary Historical Combined Financial Information of the WarnerMedia Business			51
Summary Unaudited Pro Forma Condensed Combined Financial Information of Discovery and the WarnerMedia Business			51
Summary Historical Market Price			53
RISK FACTORS			54
Risk Factors Relating to the Transactions			54
Risk Factors Relating to the Combined Company Following the Transactions			62
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			83
INFORMATION ABOUT THE DISCOVERY SPECIAL MEETING			87
Date, Time and Place			87
Purpose of the Discovery Special Meeting			87
Recommendation of the Discovery Board			87
Discovery Record Date; Stockholders Entitled to Vote			87
Quorum			88
Required Vote			88
Failure to Vote and Abstentions			89
Voting at the Discovery Special Meeting			89
Voting by Proxy			89
How Proxies Are Counted			90
Shares Held in “Street Name”			90
Revocation of Proxies and Changes to a Discovery Stockholder’s Vote			90
Tabulation of Votes			91
Solicitation of Proxies			91


Householding			92
Adjournments			92
Assistance			92
Charter Amendment, Share Issuance and “Golden Parachute” Compensation Proposals			92
PARTIES TO THE TRANSACTIONS			101
Information about Discovery			101
Information about AT&T			105
Information about the WarnerMedia Business			107
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS OF DISCOVERY AND THE WARNERMEDIA BUSINESS			113
NON-GAAP FINANCIAL MEASURE			140
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE WARNERMEDIA BUSINESS			143
AT&T Acquisition of Time Warner in June 2018			143
Reverse Morris Trust-Type Transaction Anticipated by Mid-2022			143
Overview			144
Principal Product Offerings			145
Key Developments			146
Revenue Sources			146
Comparison of the year ended December 31, 2020 to December 31, 2019			148
Factors Affecting Results from Operations			148
Operating Expenses			149
Comparison of the Nine Months Ended September 30, 2021 to September 30, 2020			150
Results of Operations			150
Other Matters			156
Quantitative and Qualitative Disclosures about Market Risk			159
THE TRANSACTIONS			160
Overview			160
Transaction Steps			162
The Separation and the Distribution			166
The Merger			167
Calculation of the Merger Consideration			167
The Reclassification			168
Trading Markets			168
Background of the Transactions			169
Recommendation of the Discovery Board; Discovery’s Reasons for the Transactions			186
Opinions of Discovery’s Financial Advisors			190
Discovery Forecasts			203
AT&T’s Reasons for the Transactions			207
WarnerMedia Projections			209
Ownership of WBD Following the Transactions			211
Board of Directors and Management of WBD Following the Transactions			211
Interests of Discovery’s Directors and Executive Officers in the Transactions			214
Interests of AT&T’s Directors and Executive Officers in the Transactions			222
Liquidity and Capital Resources Following the Transactions			223
Effects of the Reclassification on Outstanding Discovery Equity-Based Awards			224
Effects of the Distribution and the Merger on Outstanding AT&T Equity-Based Awards			225
Regulatory Approvals			227
Accounting Treatment			228
Stock Market Listing			230
Dissenters’ Rights/Rights of Appraisal			230


THE MERGER AGREEMENT			231
The Merger			231
Closing and Effective Time			231
Merger Consideration			231
Distribution of Per Share Merger Consideration			232
Distributions with Respect to Shares of WBD Common Stock after the Effective Time of the Merger			233
Transfers of Spinco Common Stock and Appraisal Rights			233
Termination of the Exchange Fund			233
Post-Closing Board of Directors and Officers			233
Discovery Special Meeting			234
Representations and Warranties			234
Conduct of Business Pending the Merger			238
Tax Matters			244
SEC Filings			245
Regulatory Matters			245
No Solicitation			247
Board Recommendation and Alternative Acquisition Agreements			251
Financing			253
Certain Other Covenants and Agreements			256
Conditions to the Merger			257
Termination			259
Termination Fees and Expenses Payable in Certain Circumstances			260
Specific Performance			262
Governing Law; Jurisdiction			262
Modification or Amendment; Waiver			262
THE SEPARATION AGREEMENT			263
The Separation			263
Conditions to the Separation			270
The Distribution			270
Conditions to the Distribution			270
Mutual Releases; Indemnification			271
General Indemnification			272
Termination			272
Dispute Resolution			273
Other Matters			273
DEBT FINANCING			274
Overview			274
Spinco Notes			274
Bridge Loans			275
Spinco Term Loan Credit Agreement			275
Revolving Credit Agreement			277
OTHER AGREEMENTS RELATED TO THE TRANSACTIONS			279
Malone Voting Agreement			279
A/N Voting Agreement			279
Consent Agreement			279
Employee Matters Agreement			279
Tax Matters Agreement			282
Transition Services Agreement			284
Intellectual Property Matters Agreement			284
Data Rights Agreement			285

iii


MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES			286
Tax Opinions			286
The Distribution			287
The Merger			289
Information Reporting and Backup Withholding			289
DESCRIPTION OF CAPITAL STOCK OF DISCOVERY AND WBD			291
General			291
Common Stock			292
Preferred Stock			295
Discovery Series A-1 Preferred Stock and Discovery Series C-1 Preferred Stock			295
New Preferred Stock			298
Certain Anti-Takeover Effects of the WBD Charter, the Discovery Bylaws and Delaware Law			298
Choice of Forum			301
Limitation of Liability and Indemnification of Officers and Directors			301
COMPARISON OF STOCKHOLDERS’ RIGHTS			303
CERTAIN BENEFICIAL OWNERS OF DISCOVERY CAPITAL STOCK			313
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			318
SUBMISSION OF DISCOVERY STOCKHOLDER PROPOSALS FOR 2022 ANNUAL MEETING			319
LEGAL MATTERS			320
EXPERTS			321
WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE			322
INDEX TO COMBINED FINANCIAL STATEMENTS OF THE WARNERMEDIA BUSINESS			F-1
ANNEXES
Annex A — Merger Agreement			A-1
Annex B — Separation Agreement			B-1
Annex C — Malone Voting Agreement			C-1
Annex D — A/N Voting Agreement			D-1
Annex E — Consent Agreement			E-1
Annex F — Form of WBD Charter			F-1
Annex G — Opinion of Allen & Company LLC			G-1
Annex H — Opinion of J.P. Morgan Securities LLC			H-1

This proxy statement/prospectus incorporates by reference important business and financial information about AT&T and Discovery from documents filed with the SEC that have not been included in or delivered with this proxy statement/prospectus. This information is available without charge at the website that the SEC maintains at www.sec.gov, as well as from other sources. See “Where You Can Find More Information; Incorporation By Reference.”

You may ask any questions about the Transactions or the Discovery special meeting or request additional documents, including copies of this proxy statement/prospectus and the enclosed proxy card, without charge, upon written or oral request to Discovery’s information agent, Innisfree M&A Incorporated (“Innisfree”), located at 501 Madison Avenue, 20th Floor, New York, NY 10022 at the telephone number (877) 750-0854 (toll-free) or (212) 750-5833 (banks and brokerage firms). In order to receive timely delivery of the documents, you must make your requests no later than , .

All information contained or incorporated by reference in this proxy statement/prospectus with respect to Discovery, Merger Sub and their respective subsidiaries, as well as information on Discovery after the completion of the Transactions, has been provided by Discovery. All other information contained or incorporated by reference in this proxy statement/prospectus with respect to AT&T, Spinco or their respective subsidiaries, or the WarnerMedia Business, and with respect to the terms and conditions of the Exchange Offer, has been provided by AT&T.

This proxy statement/prospectus is not an offer to buy, sell or exchange, and it is not a solicitation of an offer to buy, sell or exchange, any shares of AT&T common stock, Spinco common stock, Discovery capital stock or WBD common stock in any jurisdiction in which the offer, sale or exchange is not permitted.

HELPFUL INFORMATION

Certain abbreviations and terms used in the text and notes are defined below:


Abbreviation/Term		Description
Additional Amount		Means $13.0 billion, minus the Spinco Debt Securities Reduction Amounts, plus any positive Reallocation Amounts, minus the absolute value of any negative Reallocation Amounts

Advance/Newhouse		ANP and ANPP

Ancillary Agreements		The Tax Matters Agreement, the Employee Matters Agreement, the Intellectual Property License Agreement, the Transition Services Agreement and the other agreements mutually agreed to by the parties pursuant to or in connection with the Transactions

ANP		Advance/Newhouse Partnership, a New York partnership

ANPP		Advance/Newhouse Programming Partnership, a New York partnership

A/N Voting Agreement		The Voting Agreement, dated as of May 17, 2021, by and among Discovery, AT&T, Spinco, ANPP and ANP (as it may be amended from time to time)

AT&T		Depending on context, either AT&T Inc. or AT&T Inc. and its consolidated subsidiaries

AT&T common stock		The common shares, par value $1.00 per share, of AT&T Inc.

AT&T Group		AT&T and each of its subsidiaries and any legal predecessors thereto, but excluding any member of the Spinco Group

Clean-Up Spin-Off		If the Exchange Offer is not fully subscribed, the distribution by AT&T following the completion of the Exchange Offer of the remaining shares of Spinco common stock owned by AT&T on a pro rata basis to AT&T stockholders as of the Distribution record date (subject to the fact that such stockholders will have waived their rights to receive shares in the distribution with respect to any shares of AT&T common stock tendered and accepted in the Exchange Offer)

Consent Agreement		The Consent Agreement, dated as of May 17, 2021, by and among Discovery, ANPP and ANP (as it may be amended from time to time)

Discovery		Depending on context, either Discovery, Inc. or Discovery, Inc. and its consolidated subsidiaries

Discovery bylaws		The amended and restated bylaws of Discovery, effective as of November 10, 2020

Discovery charter		The restated certificate of incorporation of Discovery, as amended


Abbreviation/Term		Description
Discovery equity adjustment ratio		The number, (1) the numerator of which is the volume-weighted average price of a share of AT&T common stock on NYSE trading on the “regular way” basis (inclusive of Spinco value) on the NYSE for each of the ten trading days ending on the last trading day preceding the Distribution Date, and (2) the denominator of which is the volume-weighted average price of a share of WBD common stock on Nasdaq trading on the “regular way” basis (inclusive of Spinco value) on Nasdaq for each of the ten trading days starting on the first trading day following the Distribution Date

Discovery record date		The record date to be established for the Discovery special meeting

Distribution		The distribution by AT&T, pursuant to the Separation Agreement, of 100% of the shares of Spinco common stock to AT&T stockholders in the Exchange Offer with a Clean-Up Spin-Off to the extent required, or in a pro rata distribution

Distribution Date		The date, as shall be determined by the board of AT&T, on which the Distribution takes place

Distribution record date		The record date to be established for any pro rata distribution of shares

Employee Matters Agreement		The Employee Matters Agreement, dated as of May 17, 2021, by and among AT&T, Spinco and Discovery

Exchange Offer		The exchange offer whereby AT&T will offer to its stockholders (on the terms, and subject to the conditions, described herein) the ability to exchange all or a portion of their shares of AT&T common stock for shares of Spinco common stock, which Spinco common stock will be immediately exchanged for WBD common stock in the Merger

Malone Voting Agreement		The Voting Agreement, dated as of May 17, 2021, by and among Discovery, AT&T, Spinco, John C. Malone, the John C. Malone 1995 Revocable Trust, the Malone Discovery 2021 Charitable Remainder Unitrust and the Malone CHUB 2017 Charitable Remainder Unitrust (as it may be amended from time to time)

Merger Agreement		The Agreement and Plan of Merger, dated as of May 17, 2021, by and among Discovery, Merger Sub, AT&T and Spinco (as it may be amended from time to time)

Merger Sub		Drake Subsidiary, Inc., a Delaware corporation and a wholly owned subsidiary of Discovery

Par Exchange Requirement		The requirement that the fair market value of the Spinco Debt Securities be equal to the face value of the Spinco Debt Securities such that the Spinco Debt Securities may be resold to the public at par on the date of issuance

Pricing Date		Means the pricing date with respect to any proposed issuance of any Spinco Debt Securities issued to AT&T such that the principal amount of such issuance, together with the aggregate amount of Spinco Debt Securities issued prior to such date, would equal the Additional Amount


Abbreviation/Term		Description
Reallocation Amount		Means an amount (which may be positive or negative) equal to: (1) $30.0 billion minus (2) AT&T’s good faith estimate of the aggregate basis for U.S. federal income tax purposes of the assets to be contributed to Spinco pursuant to the Separation Plan

Reclassification		The reclassification and conversion of Discovery capital stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter into such number of shares of WBD common stock as set forth in the Merger Agreement

Separation		The transfer of the WarnerMedia Assets that are not already owned by members of the Spinco Group to members of the Spinco Group and the assumption of the WarnerMedia Liabilities that are not already owed by or otherwise the responsibility of members of the Spinco Group by members of the Spinco Group, and the transfer of Excluded Assets that are not already owned by members of the AT&T Group to members of the AT&T Group and the assumption of the Excluded Liabilities that are not already owed by or otherwise the responsibility of members of the AT&T Group by the AT&T Group, including the steps contemplated by the Separation Plan

Separation Agreement		The Separation and Distribution Agreement, dated as of May 17, 2021, by and among Discovery, AT&T and Spinco (as it may be amended from time to time)

Separation Date		The effective date of the Separation

Separation Plan		AT&T’s plan with respect to the transfer and/or assignment and assumption of WarnerMedia Assets, WarnerMedia Liabilities, Excluded Assets and Excluded Liabilities, as further described in the Separation Agreement

Share Issuance		The issuance of shares of WBD common stock to the stockholders of Spinco in the Merger

Special Cash Payment		A special cash payment from Spinco to AT&T in an amount equal to approximately $30.0 billion, subject to adjustment, including for the approximately $1.6 billion of existing debt of the WarnerMedia Business to be assumed by the Spinco Group, net working capital and other adjustments as described in “The Separation Agreement—The Separation—Special Cash Payment, Payment of the Additional Amount and Post-Closing Adjustments”

Spinco		Magallanes, Inc., a Delaware corporation and currently a wholly owned subsidiary of AT&T

Spinco common stock		The common stock, par value $0.01per share, of Spinco

Spinco Debt Financing		The indebtedness for borrowed money incurred in connection with the Financing, as described in “Debt Financing”

Spinco Debt Securities		The debt securities issued by Spinco to AT&T


Abbreviation/Term		Description
Spinco Debt Securities Reduction Amounts		Means (1) $5,753,424.66 multiplied by (2) the actual number of days elapsed beginning on the first business day after the regulatory approvals (other than the IRS approval) through and until the Pricing Date

Spinco Employee		Means, collectively, each employee of the Spinco Group as of the Distribution Date, including any such employees who are on an approved leave at such time and any AT&T employees transferred to the Spinco Group prior to the Distribution Date, other than employees employed by the Spinco Group who do not provide substantial services relating to the WarnerMedia Business as of immediately prior to the Distribution Date

Spinco Group		Spinco and its subsidiaries, after giving effect to the Separation

Transaction Documents		The Merger Agreement, the Separation Agreement, the Employee Matters Agreement, the Tax Matters Agreement, the A/N Voting Agreement, the Malone Voting Agreement, the Consent Agreement and the other Ancillary Agreements

Transactions		The transactions contemplated by the Transaction Documents, which provide for, among other things, the Separation, the Special Cash Payment, the Distribution, the Reclassification, the Merger and the payment of the Additional Amount, as described in “The Transactions”

WarnerMedia Assets		The assets allocated to Spinco and the members of the Spinco Group described in “The Separation Agreement—The Separation—Transfer of Assets”

WarnerMedia Business		Certain assets, liabilities and entities composing the WarnerMedia business of AT&T

WarnerMedia Liabilities		The liabilities allocated to Spinco and the members of the Spinco Group described in “The Separation Agreement—The Separation—Assumption of Liabilities”

WBD		Warner Bros. Discovery, Inc., the combined company upon the completion of the Transactions

WBD charter		The second restated certificate of incorporation of WBD, which will effect the Reclassification and be the certificate of incorporation of the combined company

WBD common stock		The Series A common stock of WBD, par value $0.01 per share, following the Reclassification

QUESTIONS AND ANSWERS

The following are brief answers to common questions that you may have regarding the Transactions, the consideration to be received in the Transactions and the Discovery special meeting (as discussed below). The questions and answers in this section may not address all questions that might be important to you as a Discovery stockholder. To better understand these matters, and for a description of the legal terms governing the Transactions, please read carefully and in its entirety this proxy statement/prospectus, including the annexes hereto, and the documents incorporated by reference herein, as well as the registration statement of which this proxy statement/prospectus forms a part, including the exhibits to the registration statement. See “Where You Can Find More Information; Incorporation by Reference.”

Questions and Answers about the Transactions

Q: What are the Transactions described in this proxy statement/prospectus?

A: On May 17, 2021, AT&T, Spinco and Discovery entered into definitive agreements, pursuant to which and subject to the terms and conditions therein, (1) AT&T will transfer the WarnerMedia Business to Spinco (generally referred to herein as the “Separation”), (2) Spinco will (a) make a cash distribution to AT&T equal to approximately $30.0 billion, subject to adjustment, including for the approximately $1.6 billion of existing debt of the WarnerMedia Business to be assumed by Spinco and its subsidiaries, after giving effect to the Separation (each such subsidiary, a “Spinco Subsidiary,” and together with Spinco, the “Spinco Group” or the “Spinco Entities”), net working capital and other adjustments (the “Special Cash Payment”), and (b)(i) issue to AT&T the debt instruments of Spinco (the “Spinco Debt Securities”) that satisfy the Par Exchange Requirement (as defined herein), (ii) distribute to AT&T all or a portion of the cash proceeds from the borrowing by Spinco under the Spinco Financing Agreements (as defined herein) and/or use all or a portion of the cash proceeds of such borrowing to purchase assets of the WarnerMedia Business from AT&T or (iii) undertake a combination of the actions described in (2)(b)(i) and (2)(b)(ii) such that AT&T has received, in the aggregate, the Additional Amount of approximately $13.0 billion, subject to adjustment, (3) AT&T will distribute to its stockholders all of the issued and outstanding shares of Spinco common stock in a distribution that will, at AT&T’s election, take place either by way of (i) a pro rata distribution of Spinco common stock to AT&T stockholders or (ii) an exchange offer followed by a pro rata distribution of any shares of Spinco common stock remaining if such exchange offer is not fully subscribed because the number of shares of AT&T common stock tendered and accepted does not result in all shares of Spinco common stock being distributed in the exchange offer (generally referred to herein as the “Distribution”), (4) Discovery will amend and restate its restated certificate of incorporation, as amended (the “Discovery charter”), to, among other things, change its name to Warner Bros. Discovery, Inc. and reclassify and automatically convert each share of Discovery’s Series A common stock, par value $0.01 per share (“Discovery Series A common stock”), Discovery’s Series B convertible common stock, par value $0.01 per share (“Discovery Series B common stock”), Discovery’s Series C common stock, par value $0.01 per share (“Discovery Series C common stock”), Discovery’s Series A-1 convertible participating preferred stock, par value $0.01 per share (“Discovery Series A-1 preferred stock”), and Discovery’s Series C-1 convertible participating preferred stock, par value $0.01 per share (“Discovery Series C-1 preferred stock”), issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter (as defined herein) into such number of shares of WBD common stock as set forth in the Merger Agreement (generally referred to herein as the “Reclassification” and together with the other amendments and restatements to the Discovery charter, the “Charter Amendment”) and (5) Merger Sub will merge with and into Spinco, with Spinco as the surviving corporation (generally referred to herein as the “Merger”) and as a wholly owned subsidiary of WBD.

convert into the right to receive a number of shares of WBD common stock. When the Merger is completed, holders (or, if such holders exchange all of their shares of AT&T common stock in the Exchange Offer, also former holders) of AT&T common stock that received shares of Spinco common stock in the Distribution will own approximately 71% of the outstanding shares of WBD common stock on a fully diluted basis and holders of Discovery capital stock as of immediately prior to the Reclassification and the Merger will own approximately 29% of the outstanding shares of WBD common stock on a fully diluted basis, in each case, excluding any overlaps in the pre-Merger AT&T and Discovery stockholder bases, as described under “The Transactions—Calculation of the Merger Consideration.” The Distribution and the Merger are a Reverse Morris Trust-type transaction and are expected to be tax-free to AT&T stockholders for U.S. federal income tax purposes, except to the extent that cash is paid to AT&T stockholders in lieu of fractional shares in the Distribution or the Merger. The Separation, Special Cash Payment, Distribution, Reclassification, Merger, payment of the Additional Amount and other transactions contemplated by the Transaction Documents (as defined herein) are collectively referred to herein as the “Transactions.”

The definitive agreements entered into in connection with the Transactions include (1) the Merger Agreement, (2) the Separation Agreement, (3) the Employee Matters Agreement, (4) the Tax Matters Agreement, (5) the A/N Voting Agreement, (6) the Malone Voting Agreement and (7) the Consent Agreement (each as defined herein). In addition, AT&T and Discovery and certain of their respective affiliates, including Spinco, will enter into other Ancillary Agreements in connection with the Transactions (collectively, the “Transaction Documents”). These agreements, which are described in greater detail in “Other Agreements Related to the Transactions,” will govern the relationship among AT&T and Discovery and their respective affiliates, including Spinco, after the Transactions.

The Distribution will be conducted through, at AT&T’s election, either (1) a pro rata distribution of Spinco common stock to AT&T stockholders or (2) the Exchange Offer and a potential Clean-Up Spin-Off, if necessary. This proxy statement/prospectus has been prepared under the assumption that the shares of Spinco common stock will be distributed to AT&T stockholders pursuant to the Exchange Offer. Based on market conditions prior to the Closing (as defined herein), AT&T will determine whether the shares of Spinco common stock will be distributed to AT&T stockholders in a pro rata distribution or the Exchange Offer and a potential Clean-Up Spin-Off, if necessary.

Assuming that AT&T elects to undertake the Distribution by way of the Exchange Offer, on the Closing Date (as defined herein), AT&T will distribute 100% of the shares of Spinco common stock to AT&T stockholders through the Exchange Offer, followed by a potential Clean-Up Spin-Off. In the Exchange Offer, AT&T will offer to AT&T stockholders the option to exchange all or a portion of their shares of AT&T common stock for shares of Spinco common stock. Immediately following the Exchange Offer, the shares of Spinco common stock remaining if the Exchange Offer is not fully subscribed (because the number of shares of AT&T common stock tendered and accepted in the Exchange Offer results in fewer than all of the shares of Spinco common stock being exchanged) will be distributed in a Clean-Up Spin-Off on a pro rata basis to AT&T stockholders as of the record date (the “Distribution record date”), other than in respect of any shares tendered and accepted in the Exchange Offer. Any AT&T stockholder who validly tenders (and does not properly withdraw) shares of AT&T common stock for shares of Spinco common stock and whose shares are accepted in the Exchange Offer will waive their rights with respect to such shares to receive, and forfeit any rights to, shares of Spinco common stock distributed on a pro rata basis to AT&T stockholders in a potential Clean-Up Spin-Off. If the Exchange Offer is terminated by AT&T without the exchange of shares, but the conditions to completion of the Transactions have otherwise been satisfied, all shares of Spinco common stock owned by AT&T will be distributed on a pro rata basis to holders of AT&T common stock, with a Distribution record date to be announced by AT&T.

The exchange offer agent for the Distribution (the “Exchange Offer Agent”) will hold all issued and outstanding shares of Spinco common stock in trust for the benefit of those stockholders receiving shares of Spinco common stock in the Exchange Offer and a potential Clean-Up Spin-Off, pending the completion of the

Merger. Shares of Spinco common stock will not be able to be traded during this period. Immediately after the Distribution and on the Closing Date, Merger Sub will merge with and into Spinco, with Spinco as the surviving corporation and as a wholly owned subsidiary of WBD. At the effective time of the Merger, those shares of Spinco common stock held in trust by the Exchange Offer Agent will automatically convert into the right to receive shares of WBD common stock, as described above. In addition to the conditions applicable to the Exchange Offer, the Distribution is subject to certain conditions set forth in the Separation and Distribution Agreement, dated as of May 17, 2021, by and among Discovery, AT&T and Spinco, as it may be amended from time to time (the “Separation Agreement”), and the Merger is subject to certain conditions set forth in the Merger Agreement. See “The Separation Agreement—Conditions to the Distribution” and “The Merger Agreement—Conditions to the Merger.”

Following the Transactions, WBD, as the combined company, will own and operate the WarnerMedia Business through Spinco and will also continue Discovery’s current businesses. Discovery will use reasonable best efforts to cause the WBD common stock issuable in the Transactions to be authorized for listing on Nasdaq under the symbol “WBD,” and certain significant WBD stockholders will be party to a registration rights agreement described further under “Certain Relationships and Related Party Transactions—Registration Rights Agreement.”

Q: What are the steps for the Transactions described above?

A: Below is a step-by-step list illustrating the material events relating to the Separation, the Distribution, the Reclassification and the Merger. Each of these events, as well as any conditions to their completion, is discussed in more detail elsewhere in this proxy statement/prospectus. Steps #1, #2 and #3 described below may not, and are not required pursuant to the Transaction Documents to, occur chronologically.

Step #1—The Separation. Prior to the Distribution and the Merger, AT&T will convey to Spinco or one or more subsidiaries of Spinco and certain assets and liabilities constituting the WarnerMedia Business (the “WarnerMedia Assets” and “WarnerMedia Liabilities,” respectively), and will cause any applicable subsidiary of AT&T to convey to AT&T or its designated subsidiary (other than Spinco or any other member of the Spinco Group) certain excluded assets and excluded liabilities in order to separate the WarnerMedia Business, in each case, as set forth in and subject to the terms and conditions of the Separation Agreement. Thereafter, AT&T will transfer all of the equity interests in each of the subsidiaries of AT&T holding WarnerMedia Assets and WarnerMedia Liabilities, and constituting the WarnerMedia Business, directly or indirectly, to Spinco.

Step #2—Issuance of Spinco Debt Securities. Prior to the effective time of the Merger, and as a condition to the Distribution, Spinco will (1) issue to AT&T the Spinco Debt Securities that satisfy the Par Exchange Requirement, (2) distribute to AT&T all or a portion of the cash proceeds from the borrowing by Spinco under the Spinco Financing Agreements and/or use all or a portion of the cash proceeds of such borrowing to purchase assets of the WarnerMedia Business from AT&T or (3) undertake a combination of the actions described in (1) and (2) such that AT&T has received, in the aggregate, the Additional Amount of approximately $13.0 billion, subject to adjustment.

AT&T expects to transfer the Spinco Debt Securities to one or more investment banks in exchange for certain debt obligations of AT&T held by such investment bank(s) as principal for their own account (the “Securities Exchange”). Following the Securities Exchange, such investment bank(s) or their affiliates are expected to sell the Spinco Debt Securities to third-party investors.

adjustments. See “The Separation Agreement—The Separation— Special Cash Payment, Payment of the Additional Amount and Post-Closing Adjustments” for further description of adjustments to the Special Cash Payment.

Step #4—Issuance of Spinco Common Stock. Prior to the Distribution, Spinco will issue to AT&T a number of shares of Spinco common stock such that the number of shares of Spinco common stock issued and outstanding at the time of the Distribution is equal to the number of shares of WBD common stock to be issued to the stockholders of Spinco in the Merger (the “Share Issuance”).

Step #5—The Distribution; Exchange Offer and Clean-Up Spin-Off. On the Closing Date, AT&T will distribute 100% of the shares of Spinco common stock to AT&T stockholders by, at AT&T’s election, either (1) a pro rata distribution of Spinco common stock to AT&T stockholders or (2) the Exchange Offer and a potential Clean-Up Spin-Off, if necessary. Assuming that AT&T elects to undertake the Distribution by way of the Exchange Offer, AT&T will offer to its stockholders the option to exchange all or a portion of their shares of AT&T common stock for shares of Spinco common stock. Immediately following the Exchange Offer, the shares of Spinco common stock remaining if the Exchange Offer is not fully subscribed (because the number of shares of AT&T common stock tendered and accepted in the Exchange Offer results in fewer than all of the shares of Spinco common stock being exchanged) will be distributed in a Clean-Up Spin-Off on a pro rata basis to AT&T stockholders as of the Distribution record date, other than in respect of any shares tendered and accepted in the Exchange Offer. Any AT&T stockholder who validly tenders (and does not properly withdraw) shares of AT&T common stock for shares of Spinco common stock and whose shares are accepted in the Exchange Offer will waive their rights with respect to such shares to receive, and forfeit any rights to, shares of Spinco common stock distributed on a pro rata basis to AT&T stockholders in a potential Clean-Up Spin-Off. See “The Separation Agreement—The Distribution.”

The Exchange Offer Agent will hold all issued and outstanding shares of Spinco common stock in trust for the benefit of stockholders that are receiving shares of Spinco common stock in the Exchange Offer and a potential Clean-Up Spin-Off, pending the completion of the Merger. Shares of Spinco common stock will not be able to be traded during this period.

In order to enable AT&T stockholders to value their shares of Spinco common stock in the Exchange Offer, AT&T intends to cause Spinco to issue such number of shares of Spinco common stock to AT&T prior to the Distribution such that the number of shares of Spinco common stock is equal to the number of shares of WBD common stock to be issued in the Share Issuance. As such, the actual number of shares of Spinco common stock distributed in the Distribution may fluctuate between the date hereof and the Closing Date to the extent the number of fully diluted shares of WBD common stock (and by extension the Share Issuance) changes between the date hereof and the date of the Distribution (the “Distribution Date”).

This proxy statement/prospectus has been prepared under the assumption that the shares of Spinco common stock will be distributed to AT&T stockholders pursuant to the Exchange Offer. Based on market conditions prior to the Closing, AT&T will determine whether the shares of Spinco common stock will be distributed to AT&T stockholders in a pro rata distribution or the Exchange Offer and a potential Clean-Up Spin-Off, if necessary.

Step #6—The Reclassification. On the Closing Date and prior to the effective time of the Merger, Discovery will amend and restate the Discovery charter, to provide that (1) each share of Discovery Series A common stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter will be reclassified and automatically converted into one share of WBD common stock, (2) each share of Discovery Series B common stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter will be reclassified and automatically converted into one share of WBD common stock, (3) each share of Discovery Series C common stock issued and outstanding or

held by Discovery as treasury stock immediately prior to the effective time of the WBD charter will be reclassified and automatically converted into one share of WBD common stock, (4) each share of Discovery Series A-1 preferred stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter will be reclassified and automatically converted into 13.11346315 shares of WBD common stock and (5) each share of Discovery Series C-1 preferred stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter will be reclassified and automatically converted into such number of shares of WBD common stock as the number of shares of Discovery Series C common stock such share of Discovery Series C-1 preferred stock would have been convertible into immediately prior to the effective time of the WBD charter, which, as of September 30, 2021, would have been 19.3648 shares of WBD common stock.

Step #7—The Merger. In the Merger, Merger Sub will be merged with and into Spinco, with Spinco surviving as a wholly owned subsidiary of WBD. In the Merger, each issued and outstanding share of Spinco common stock (except for shares of Spinco common stock held by Spinco as treasury stock or by any other member of the Spinco Group, which will be canceled and cease to exist and no consideration will be delivered in exchange therefor) will automatically convert into the right to receive a number of shares of WBD common stock such that immediately after the Merger, such holders (or, if such holders exchange all of their shares of AT&T common stock in the Exchange Offer, also former holders) of AT&T common stock that received shares of Spinco common stock in the Distribution will own approximately 71% of the outstanding shares of WBD common stock on a fully diluted basis and holders of Discovery capital stock as of immediately prior to the Reclassification and the Merger will own approximately 29% of the outstanding shares of WBD common stock on a fully diluted basis, in each case, excluding any overlaps in the pre-Merger AT&T and Discovery stockholder bases, as described under “The Transactions—Calculation of the Merger Consideration.”

The foregoing are subject to certain conditions to their completion. See “The Separation Agreement—Conditions to the Separation,” “The Separation Agreement—Conditions to the Distribution,” “The Merger Agreement—Conditions to the Merger.”

Q: What are Discovery’s reasons for pursuing the Transactions?

A: In reaching its decision to approve the Transaction Documents and the Transactions and recommend that Discovery stockholders approve the Charter Amendment proposals and the Share Issuance proposal, the Discovery board of directors (the “Discovery Board”) considered a number of factors as a whole and considered the relevant information and factors to be favorable to, and in support of, its determination. In the course of its deliberations, the Discovery Board also considered a variety of risks and other potentially negative factors. For the factors considered by the Discovery Board in reaching its decision, see “Recommendation of the Discovery Board; Discovery’s Reasons for the Transactions.” The Discovery Board unanimously recommends that Discovery stockholders vote “FOR” the Charter Amendment proposals and “FOR” the Share Issuance proposal.

In addition, the Discovery Board unanimously recommends that Discovery stockholders vote “FOR” the “Golden Parachute” Compensation proposal.

Q: What will be the relationship among AT&T, Discovery and Spinco after the completion of the Transactions?

A: Following the Transactions, Spinco will no longer be a subsidiary of AT&T. Instead, Merger Sub will merge with and into Spinco, with Spinco surviving the Merger and becoming a wholly owned subsidiary of Discovery, which will be renamed Warner Bros. Discovery, Inc.

AT&T, Spinco and Discovery have entered into certain agreements, and will enter into certain additional agreements, that will govern certain arrangements among them following the completion of the Transactions

relating to, among other things, employee matters, tax matters, transition services, intellectual property matters and data rights. See “Other Agreements Related to the Transactions.”

Q: What equity stake will Discovery and AT&T stockholders hold in Discovery following the Transactions?

A: It is expected that upon completion of the Transactions, holders (or, if such holders exchange all of their shares of AT&T common stock in the Exchange Offer, also former holders) of AT&T common stock that received shares of Spinco common stock in the Distribution will own approximately 71% of the outstanding shares of WBD common stock on a fully diluted basis and holders of Discovery capital stock as of immediately prior to the Reclassification and the Merger will own approximately 29% of the outstanding shares of WBD common stock on a fully diluted basis, in each case, excluding any overlaps in the pre-Merger AT&T and Discovery stockholder bases, as described under “The Transactions—Calculation of the Merger Consideration.” The ownership of the combined company following the Transactions was the result of a negotiated value exchange between AT&T and Discovery, which was based upon each party’s valuations, prior to the execution of the Merger Agreement and the Separation Agreement, of Discovery and the WarnerMedia Business.

Q: What will AT&T stockholders receive in the Transactions?

A: On the Closing Date, AT&T will distribute 100% of the shares of Spinco common stock to AT&T stockholders by, at AT&T’s election, either (1) a pro rata distribution of Spinco common stock to AT&T stockholders or (2) the Exchange Offer and a potential Clean-Up Spin-Off, if necessary. Assuming that AT&T elects to undertake the Distribution by way of the Exchange Offer, AT&T will offer to its stockholders the option to exchange all or a portion of their shares of AT&T common stock for shares of Spinco common stock. Immediately following the Exchange Offer, the shares of Spinco common stock remaining if the Exchange Offer is not fully subscribed (because the number of shares of AT&T common stock tendered and accepted in the Exchange Offer results in fewer than all of the shares of Spinco common stock being exchanged) will be distributed in a Clean-Up Spin-Off on a pro rata basis to AT&T stockholders as of the Distribution record date, other than in respect of any shares tendered and accepted in the Exchange Offer. In the Merger, the shares of Spinco common stock will automatically convert into the right to receive shares of WBD common stock. AT&T stockholders participating in the Exchange Offer will be required to exchange those shares that they tender in the Exchange Offer and that are not properly withdrawn and accepted by AT&T for the shares of Spinco common stock they receive therefor. If the Exchange Offer is terminated by AT&T without the exchange of shares, but the conditions to completion of the Transactions have otherwise been satisfied, all shares of Spinco common stock owned by AT&T will be distributed on a pro rata basis to holders of AT&T common stock, with a Distribution record date to be announced by AT&T.

In the Merger, each issued and outstanding share of Spinco common stock (except for shares of Spinco common stock held by Spinco as treasury stock or by any other member of the Spinco Group, which will be canceled and cease to exist and no consideration will be delivered in exchange therefor) will automatically convert into the right to receive a number of shares of WBD common stock such that immediately after the Merger, such holders (or, if such holders exchange all of their shares of AT&T common stock in the Exchange Offer, also former holders) of AT&T common stock that received shares of Spinco common stock in the Distribution will own approximately 71% of the outstanding shares of WBD common stock on a fully diluted basis and holders of Discovery capital stock as of immediately prior to the Reclassification and the Merger will own approximately 29% of the outstanding shares of WBD common stock on a fully diluted basis, in each case, excluding any overlaps in the pre-Merger AT&T and Discovery stockholder bases, as described under “The Transactions—Calculation of the Merger Consideration.” Holders of Spinco common stock will receive cash from the Exchange Agent (as defined herein) in lieu of any fractional shares of WBD common stock to which such stockholders would otherwise be entitled. All shares of WBD common stock issued in the Merger will be issued in book-entry form.

As of , based on the reported closing price on Nasdaq of Discovery Series A common stock as of such date and assuming a Share Issuance of shares, the shares of WBD common stock that Discovery expects to issue in the Merger would have a market value of approximately $ billion in the aggregate (the actual value will not be known until the Closing Date). The actual total value of the shares of WBD common stock to be issued in the Merger will depend on the market price of WBD common stock following the completion of the Transactions, including after giving effect to the Reclassification. As a result of the Transactions, including the Reclassification, the market price of WBD common stock could be significantly different from the reported closing price on Nasdaq of Discovery Series A common stock prior to the completion of the Transactions. See “The Transactions—Structure of the Transactions” and “The Transactions—Calculation of the Merger Consideration.”

Q: Are there any conditions to the completion of the Transactions?

A: Yes. Completion of the Merger is subject to a number of conditions, including:

•

the registration statements on Forms S-4 and S-1 of which this proxy statement/prospectus forms a part have become effective under the Securities Act of 1933, as amended (the “Securities Act”);

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the approval by Discovery stockholders of the Charter Amendment and the Share Issuance;

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the Requisite Regulatory Approvals (as defined herein) will be in full force and effect;

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the Separation and the Distribution will have been completed;

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the expiration or termination of any waiting period applicable to the Merger under applicable antitrust or competition laws in the United States and receipt of additional antitrust approvals in applicable jurisdictions;

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AT&T will have received the Special Cash Payment and the Additional Amount immediately before the Distribution;

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the receipt by AT&T, with a copy to Discovery, of (1) the Tax Opinions (as defined herein) from AT&T’s tax counsel, dated as of the Closing Date, and (2) the IRS Ruling (as defined herein); and

•

other customary conditions.

Completion of the Separation is subject to the following conditions:

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each of the parties to the Merger Agreement has irrevocably confirmed to each other that each of the conditions to such party’s obligations to effect the Merger has been satisfied, will be satisfied at the time of the Distribution or, subject to applicable laws, is or has been waived by such party; and

•

receipt by AT&T and Spinco of any necessary permits and authorizations under applicable state and federal securities laws in connection with the Distribution.

Completion of the Distribution is subject to the following conditions:

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the completion of the Separation substantially in accordance with the Separation Plan (as defined herein) (other than those steps that are expressly contemplated to occur at or after the Distribution);

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AT&T will have received (1) Spinco Debt Securities that satisfy the Par Exchange Requirement, (2) cash proceeds from the borrowing by Spinco under the Spinco Financing Agreements pursuant to the Merger Agreement or (3) a combination of the foregoing, such that the aggregate principal amount of such Spinco Debt Securities, together with such cash proceeds, will be equal to the Additional Amount of approximately $13.0 billion, subject to adjustment;

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the completion of the Special Cash Payment in accordance with the Separation Agreement;

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receipt by the AT&T Board of the Solvency Opinion (as defined herein) from an independent appraisal firm; and such Solvency Opinion will be reasonably acceptable to AT&T in form and substance in AT&T’s sole discretion; and such Solvency Opinion will not have been withdrawn or rescinded or modified in any respect adverse to AT&T;

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the execution and delivery of the Ancillary Agreements by each party thereto;

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each of the conditions to AT&T’s obligations to effect the Merger has been satisfied or waived (other than those conditions that by their nature are to be satisfied contemporaneously with the Distribution and/or the Merger, so long as such conditions are capable of being satisfied at such time); and

•

Discovery has irrevocably confirmed to AT&T that each of the conditions to Discovery’s obligations to effect the Merger has been satisfied, will be satisfied at the time of the Distribution or, subject to applicable laws, is or has been waived by Discovery.

For a description of the material conditions precedent to the Transactions, see “The Merger Agreement—Conditions to the Merger,” “The Separation Agreement—Conditions to the Separation” and “The Separation Agreement—Conditions to the Distribution.”

Q: What will Discovery stockholders receive in the Transactions?

A: Discovery stockholders will not directly receive any consideration in the Merger. Prior to the effective time of the Merger, all shares of Discovery Series A common stock, Discovery Series B common stock, Discovery Series C common stock, Discovery Series A-1 preferred stock and Discovery Series C-1 preferred stock (collectively, “Discovery capital stock”) issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter will be reclassified and automatically converted into such number of shares of WBD common stock as set forth in the Merger Agreement. All shares of WBD common stock issued in the Reclassification will be issued in book-entry form. See “The Transactions—The Reclassification.” Immediately after the Merger, Discovery stockholders will own shares in the combined company, WBD, which will include the WarnerMedia Business by virtue of the fact that Spinco will be a wholly owned subsidiary of WBD. WBD expects to become responsible for up to approximately $43.0 billion of additional debt, including existing debt of the WarnerMedia Business to be assumed by the Spinco Group, and debt that may be incurred by Spinco and used on the Closing Date to finance, in part, the Special Cash Payment and the Additional Amount and to otherwise fund the other Transactions and to pay the related transaction fees and expenses, with the ultimate amount of such debt subject to adjustment, including for net working capital, as described in “The Separation Agreement—The Separation—Special Cash Payment, Payment of the Additional Amount and Post-Closing Adjustments.” After the completion of the Transactions, it is expected that the debt obligations incurred by Spinco in connection with the Transactions will be guaranteed by WBD, Discovery Communications, LLC (“DCL”) and Scripps Networks Interactive, Inc. (“Scripps”). In addition, following the Merger, by virtue of the fact that Spinco will be a wholly owned subsidiary of WBD, the consolidated indebtedness of WBD and its subsidiaries will include the indebtedness of Spinco. See “Debt Financing.”

Q: What is the estimated total value of the Transactions?

A: Discovery expects to issue approximately shares of WBD common stock in the Merger. See “The Transactions—Calculation of the Merger Consideration.” In addition, AT&T will receive a one-time Special Cash Payment and, in addition, the Additional Amount, which is expected to include Spinco Debt Securities, from Spinco, each subject to adjustment. Based upon the reported closing price of $ per share for Discovery Series A common stock on Nasdaq on and assuming a Share Issuance of shares and no adjustments to the Special Cash Payment and the Additional Amount, the total combined value of the shares to be issued by Discovery and the cash and Spinco Debt Securities expected to be received by AT&T from Spinco would be approximately $ billion. The actual value of the shares of WBD common stock to be issued in the Merger will depend on the market price of WBD common stock following the completion of the

Transactions, including after giving effect to the Reclassification, and the amount of the Special Cash Payment and the Additional Amount (which is expected to include Spinco Debt Securities) will be determined based on adjustments thereto (if any). See “The Separation Agreement—The Separation— Special Cash Payment, Payment of the Additional Amount and Post-Closing Adjustments.” As a result of the Transactions, including the Reclassification, the market price of WBD common stock could be significantly different from the reported closing price on Nasdaq of Discovery Series A common stock prior to the completion of the Transactions.

Q: Are there possible adverse effects on the value of WBD common stock to be received by Discovery and AT&T stockholders?

A: Discovery stockholders, by virtue of the Reclassification, and AT&T stockholders, if they elect to exchange their shares of AT&T common stock for shares of Spinco common stock in the Exchange Offer, or by virtue of a pro rata distribution, will receive shares of WBD common stock. The Share Issuance (as well as any discount in the Exchange Offer) may negatively affect the market price of WBD common stock. Further, as a result of the Reclassification, the market price of WBD common stock could be significantly different from the reported closing prices on Nasdaq of Discovery Series A common stock, Discovery Series B common stock and Discovery Series C common stock prior to the completion of the Transactions. Discovery also expects to incur significant one-time costs in connection with the Transactions, including advisory, legal, accounting and other professional fees related to the Transactions, transition and integration expenses, such as consulting professionals’ fees, information technology implementation costs, financing fees and relocation costs, that Discovery management believes will be necessary to realize anticipated annualized cost synergies. The incurrence of these costs may have an adverse impact on Discovery’s and WBD’s liquidity or operating results in the periods in which they are incurred. Finally, the combined company will be required to devote a significant amount of time and attention to the process of integrating the operations of Discovery and the WarnerMedia Business. If the management of the combined company is not able to effectively manage the process, WBD’s business could suffer and its stock price may decline. In addition, the market price of WBD common stock could decline as a result of sales of a large number of shares of WBD common stock in the market after the completion of the Transactions or even the perception that these sales could occur. See “Risk Factors” for a further discussion of the material risks associated with the Transactions.

Q: How will the Transactions impact the future liquidity and capital resources of the combined company?

A: WBD’s level of consolidated indebtedness will increase from that of Discovery’s as a result of the Transactions. Spinco expects to incur total indebtedness of up to approximately $43.0 billion in connection with the Spinco Notes (as defined herein) (including the Spinco Debt Securities), the Bridge Loans (as defined herein) and the Spinco Term Loan Credit Agreement (as defined herein). See “Debt Financing.” Following the completion of the Transactions, it is expected that all obligations of Spinco with respect to the Spinco Notes (including the Spinco Debt Securities), the Bridge Loans (if applicable) and the Spinco Term Loan Credit Agreement will be guaranteed by WBD, DCL and Scripps. In addition, following the Merger, by virtue of the fact that Spinco will be a wholly owned subsidiary of WBD, the consolidated indebtedness of WBD and its subsidiaries will include the indebtedness of Spinco. Discovery anticipates that WBD’s primary sources of liquidity for working capital and operating activities will be cash from operations and borrowings under its existing credit facilities. Discovery expects that these sources of liquidity will be sufficient to make required payments of interest on the outstanding WBD debt and to fund working capital and capital expenditure requirements, including the significant one-time costs relating to the Transactions. Discovery expects that WBD or Spinco, as applicable, will be able to comply with the financial and other covenants under the Commitment Letter (as defined herein) governing the Bridge Loans, the Spinco Term Loan Credit Agreement and the indentures governing the Spinco Notes (including the Spinco Debt Securities), if any.

Discovery expects WBD to realize cost synergies of over $3.0 billion on a run-rate basis by the end of the second full year after the completion of the Transactions. These cost synergies are expected to be driven by

technology, marketing and platform efficiencies. Discovery expects WBD to incur significant, one-time costs of approximately $0.7 billion in connection with completing the Transactions and an additional approximately $1.5 billion in one-time cash costs during the first year following the completion of the Transactions that Discovery believes will be necessary to realize the anticipated cost synergies from the Transactions. No assurances of the timing or amount of synergies able to be captured, or the timing or amount of costs necessary to achieve those synergies, can be provided. See “The Transactions—Liquidity and Capital Resources Following the Transactions.” The incurrence of these costs may have an adverse impact on Discovery’s and WBD’s liquidity, cash flows and operating results in the periods in which they are incurred, and actual costs may be higher than currently anticipated.

Q: How will the rights of Discovery stockholders change after the Transactions?

A: In the Reclassification, (1) each share of Discovery Series A common stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter will be reclassified and automatically converted into one share of WBD common stock, (2) each share of Discovery Series B common stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter will be reclassified and automatically converted into one share of WBD common stock, (3) each share of Discovery Series C common stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter will be reclassified and automatically converted into one share of WBD common stock, (4) each share of Discovery Series A-1 preferred stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter will be reclassified and automatically converted into 13.11346315 shares of WBD common stock and (5) each share of Discovery Series C-1 preferred stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter will be reclassified and automatically converted into such number of shares of WBD common stock as the number of shares of Discovery Series C common stock such share of Discovery Series C-1 preferred stock would have been convertible into immediately prior to the effective time of the WBD charter, which, as of September 30, 2021, would have been 19.3648 shares of WBD common stock. No shares of WBD preferred stock are expected to be issued and outstanding immediately following the Reclassification.

In connection with the Transactions, including the Reclassification, Discovery will amend and restate the Discovery charter. The existing rights of Discovery stockholders under the Discovery charter will be replaced by new rights upon the Charter Amendment and the effectiveness of the second restated certificate of incorporation of WBD, which will be the certificate of incorporation of the combined company (the “WBD charter”). For a description of the rights of stockholders under the Discovery charter, the WBD charter and the amended and restated bylaws of Discovery (the “Discovery bylaws”), see “Description of Capital Stock of Discovery and WBD.” In addition, in connection with the completion of the Transactions, it is expected that the Discovery bylaws will be amended and restated to, among other things, reflect the WBD charter.

Q: What will AT&T receive in the Transactions?

A: Prior to the Distribution, AT&T will receive the Special Cash Payment in the amount of approximately $30.0 billion, subject to adjustment, including for the approximately $1.6 billion of existing debt of the WarnerMedia Business to be assumed by the Spinco Group, net working capital and other adjustments, and the Additional Amount, which is expected to include Spinco Debt Securities, equal to approximately $13.0 billion, subject to adjustment, which will in turn be used by AT&T to repay certain existing debt pursuant to the Securities Exchange. See “The Separation Agreement—The Separation— Special Cash Payment, Payment of the Additional Amount and Post-Closing Adjustments” for further description of adjustments to the Special Cash Payment.

Q: Will the Distribution and the Merger affect the AT&T equity-based awards held by Spinco Employees?

A: Yes. Certain Spinco Employees hold AT&T RSU Awards (as defined herein) and/or AT&T Option Awards (as defined herein). Upon or following the Closing, with respect to Spinco Employees, (1) each AT&T RSU Award that was granted prior to May 17, 2021 and is outstanding and unvested as of the Closing will be forfeited, and WBD will grant each such Spinco Employee a WBD RSU Award (as defined herein) subject to the same terms and conditions, except that the number of shares of WBD common stock to which such WBD RSU Award relates will be equal to the product, rounded up to the nearest whole number of shares, obtained by multiplying (a) the number of unvested shares of AT&T common stock to which the corresponding AT&T RSU Award related immediately prior to the Closing by (b) the Discovery equity adjustment ratio (as defined herein); (2) each AT&T RSU Award that was granted prior to May 17, 2021 and is outstanding and vested as of the Closing and each AT&T Option Award that was granted prior to May 17, 2021 and is outstanding as of the Closing will remain an award denominated in AT&T common stock with the same terms and conditions, provided that such award may be equitably adjusted to the extent needed to prevent the dilution or enlargement of rights thereunder as determined by the compensation committee of the AT&T Board (the “AT&T Compensation Committee”) to reflect the Distribution; and (3) each AT&T RSU Award that was granted after May 17, 2021 and is outstanding as of the Closing will be converted into a WBD RSU Award subject to the same terms and conditions, except that the number of shares of WBD common stock to which such WBD RSU Award relates will be equal to the product, rounded up to the nearest whole number of shares, obtained by multiplying (a) the number of shares of AT&T common stock to which the corresponding AT&T RSU Award related immediately prior to the Closing by (b) the Discovery equity adjustment ratio.

For a more complete description of the treatment of AT&T equity-based awards held by Spinco Employees that are outstanding as of the Closing, see “The Transactions—Effects of the Distribution and the Merger on Outstanding AT&T Equity-Based Awards.”

Q: Will the Distribution and the Merger affect the AT&T equity-based awards held by AT&T employees?

A: Certain current and former employees of AT&T who are not currently or will not become Spinco Employees as a result of the Distribution hold equity-based awards relating to shares of AT&T common stock. Upon or following the Closing, each AT&T RSU Award, AT&T Restricted Stock Award (as defined herein), AT&T PSU Award (as defined herein) and AT&T Option Award, in each case that is outstanding as of the Closing and held by an AT&T employee, will remain an award denominated in AT&T common stock with the same terms and conditions, provided that such award may be equitably adjusted to the extent needed to prevent the dilution or enlargement of rights thereunder as determined by the AT&T Compensation Committee to reflect the Distribution.

For a more complete description of the treatment of AT&T equity-based awards held by AT&T employees that are outstanding as of the Closing, see “The Transactions—Effects of the Distribution and the Merger on Outstanding AT&T Equity-Based Awards.”

Q: What are the material U.S. federal income tax consequences to AT&T stockholders resulting from the Transactions?

A: The completion of the Distribution, the Merger and certain related Transactions are conditioned upon AT&T’s receipt, with a copy to Discovery, of (1) an opinion from its tax counsel substantially to the effect that, among other things, for U.S. federal income tax purposes, the Distribution, taken together with certain related Transactions, will qualify as a “reorganization” under Section 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the “Code”) and a tax-free distribution under Section 355 of the Code and that certain other related Transactions will qualify for their intended tax-free treatment, (2) an opinion from its tax counsel substantially to the effect that the Merger will qualify as a “reorganization” under Section 368(a) of the Code (collectively, the “Tax Opinions”) and (3) a private letter ruling from the Internal Revenue Service (the “IRS”)

regarding the qualification of the Distribution and certain related Transactions for tax-free treatment (the “IRS Ruling”). Provided that such transactions so qualify, AT&T stockholders generally will not recognize any income, gain or loss for U.S. federal income tax purposes upon the receipt of Spinco common stock in the Distribution or WBD common stock in the Merger (except for any gain or loss attributable to the receipt of cash in lieu of fractional shares of WBD common stock). See “Material U.S. Federal Income Tax Consequences” for more information regarding the potential tax consequences of the Transactions.

Q: What are the material U.S. federal income tax consequences to Discovery and Discovery stockholders resulting from the Transactions?

A: Discovery will not recognize any gain or loss for U.S. federal income tax purposes upon the completion of the Merger. Because Discovery stockholders in their capacity as such will not receive consideration in the Distribution or the Merger, Discovery stockholders will generally not recognize gain or loss for U.S. federal income tax purposes upon either the Distribution (including the Exchange Offer) or the Merger. Neither Discovery nor Discovery stockholders are expected to recognize gain or loss for U.S. federal income tax purposes upon the Reclassification. Discovery stockholders should consult their own tax advisors for a full understanding of the tax consequences to them of the Transactions in light of their particular circumstances.

Q: Are there risks associated with the Transactions?

A: Yes. The material risks and uncertainties associated with the Transactions are discussed in “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” Those risks include, among others, the possibility that the Transactions may not be completed, the possibility that Discovery may fail to realize the anticipated financial and other benefits of the Merger, the uncertainty that Discovery will be able to integrate the WarnerMedia Business successfully, the possibility that Discovery may be unable to provide benefits and services or access to equivalent financial strength and resources to the WarnerMedia Business that historically have been provided by AT&T, and the substantial dilution to the ownership interest of current Discovery stockholders following the completion of the Merger.

Q: Who will serve on the WBD Board following the completion of the Transactions?

A: As of the effective time of the Merger, the WBD board of directors (the “WBD Board”) will consist of 13 directors, consisting of six directors designated by Discovery, including the Chief Executive Officer of WBD as of immediately after the effective time of the Merger (“Discovery Designees”), and seven directors designated by AT&T (“AT&T Designees”).

The Class I directors will initially include two Discovery Designees and two AT&T Designees, the Class II directors will initially include two Discovery Designees and two AT&T Designees and the Class III directors will initially include two Discovery Designees and three AT&T Designees, one of whom will be the Chairperson of the WBD Board. The Discovery Designees will include David M. Zaslav, who will serve as President and Chief Executive Officer of WBD. It is expected that John C. Malone will also serve as a Discovery Designee. Pursuant to the terms of the Consent Agreement, the initial Discovery Designees for the Class III directors will be Steven A. Miron and Steven O. Newhouse. See “Other Agreements Related to the Transactions—Consent Agreement.” The other Discovery Designees and the AT&T Designees will be named prior to the Closing.

The initial term of the Class I directors will expire immediately following WBD’s first annual meeting of stockholders after the completion of the Merger, the initial term of the Class II directors will expire immediately following WBD’s second annual meeting of stockholders after the completion of the Merger and the initial term of the Class III directors will expire immediately following WBD’s third annual meeting of stockholders after the completion of the Merger. Upon the expiration of the initial term of each class of directors, such class of WBD directors will be elected for a one-year term expiring immediately following each WBD annual meeting of stockholders.

Q: Will Discovery’s current senior management team manage the business of WBD after the Transactions?

A: The Merger Agreement provides that, as of the effective time of the Merger, David M. Zaslav will serve as President and Chief Executive Officer of WBD. Mr. Zaslav will be responsible for the strategic direction of WBD, including its overall operations and performance. The Merger Agreement provides that, prior to the completion of the Transactions, Discovery and AT&T are to cooperate and consult in good faith to appoint such other senior executive officers as are mutually agreed, and to determine such senior executive officers’ initial roles, titles and responsibilities, as of the effective time of the Merger. Gunnar Wiedenfels will serve as Chief Financial Officer of WBD. Prior to and after the completion of the Transactions, the Chief Executive Officer will have principal responsibility in the appointment of the senior executive team and their roles, titles and responsibilities. The Chief Executive Officer will also have principal responsibility in the approval of appointments for management positions for corporate functions of WBD.

Q: What stockholder approvals will be needed in connection with the Transactions?

A: Discovery stockholders will need to approve each of the Charter Amendment proposals by the affirmative vote of (1) at least 75% of the outstanding shares of Discovery Series B common stock, voting as a class, (2) at least a majority of the outstanding shares of Discovery Series A-1 preferred stock, voting as a class, (3) at least a majority of the outstanding shares of Discovery Series C-1 preferred stock, voting as a class, and (4) at least a majority of the combined voting power of the outstanding shares of Discovery Series A common stock, Discovery Series B common stock and Discovery Series A-1 preferred stock (collectively, “Discovery voting stock”), voting together as a single class, present in person or represented by proxy at the special meeting to be held on (the “Discovery special meeting”) and entitled to vote on such proposal.

Discovery stockholders will need to approve the Share Issuance proposal by the affirmative vote of at least a majority of the combined voting power of the outstanding shares of Discovery voting stock, voting together as a single class, present in person or represented by proxy at the Discovery special meeting and entitled to vote on such proposal. The approval, on an advisory (non-binding) basis, of the “Golden Parachute” Compensation proposal is not a condition to the obligations of Discovery to complete the Transactions.

In connection with entering into the Merger Agreement, Discovery, AT&T and Spinco entered into voting agreements with (1) Dr. Malone and certain of his affiliates and (2) Advance/Newhouse Programming Partnership (“ANPP”) and Advance/Newhouse Partnership (“ANP,” and together with ANPP, “Advance/Newhouse”). Pursuant to the voting agreements, (1) Dr. Malone and certain of his affiliates, who collectively hold approximately % and % of the issued and outstanding shares of Discovery Series A common stock and Discovery Series B common stock, respectively, which is approximately % of the aggregate voting power of the shares of Discovery voting stock as of the Discovery record date and (2) Advance/Newhouse, which holds all of the issued and outstanding shares of Discovery Series A-1 preferred stock, which is approximately % of the aggregate voting power of the shares of Discovery voting stock as of the Discovery record date, and all of the issued and outstanding shares of Discovery Series C-1 preferred stock, have agreed to vote their shares in favor of the Charter Amendment proposals and the Share Issuance Proposal. For additional information regarding the voting agreements, see “Other Agreements Related to the Transactions—Malone Voting Agreement” and “Other Agreements Related to the Transactions—A/N Voting Agreement.”

Discovery also entered into the Consent Agreement with Advance/Newhouse. Pursuant to the Consent Agreement, Advance/Newhouse has delivered an irrevocable written consent to Discovery consenting to, approving and adopting the Merger Agreement and any actions required thereby, including the Charter Amendment and the Share Issuance. The Consent was delivered in accordance with the affirmative vote or written consent required pursuant to the Certificate of Designation of Series A-1 Convertible Participating Preferred Stock of Discovery for any Special A-1 Class Vote Matter (as such term is defined therein). As of the

Discovery record date, Advance/Newhouse holds all of the issued and outstanding shares of Discovery Series A-1 preferred stock. For additional information regarding the Consent Agreement, see “Other Agreements Related to the Transactions—Consent Agreement.”

No vote of AT&T stockholders is required or being sought in connection with the Transactions.

Q: Where will the WBD shares issued in connection with the Merger be listed?

A: Discovery will use reasonable best efforts to cause the WBD common stock issuable in the Transactions to be authorized for listing on Nasdaq under the symbol “WBD.”

Q: What is the current relationship between Spinco and Discovery?

A: Spinco is currently a wholly owned subsidiary of AT&T and was formed as a Delaware corporation on May 14, 2021 to effectuate the Separation, the Distribution and the Merger. Other than in connection with the Transactions, there is no relationship between Spinco and Discovery.

Q: When will the Transactions be completed?

A: Discovery and AT&T expect the Transactions to be completed in mid-2022, subject to satisfaction of the closing conditions to the Transactions, including receipt of Discovery stockholder approval for the Charter Amendment and the Share Issuance and certain regulatory approvals. Discovery stockholders will vote on the Charter Amendment and the Share Issuance at a special meeting to be held on and the status of regulatory approvals is set forth in “The Transactions—Regulatory Approvals.” In addition, other important conditions to the closing of the Merger and the other Transactions contemplated by the Merger Agreement (the “Closing” and the date on which the Closing occurs, the “Closing Date”) exist, including, among other things, the completion of the Separation and the Distribution and the receipt by AT&T, with a copy to Discovery, of the Tax Opinions and the IRS Ruling. It is possible that factors outside of Discovery’s and AT&T’s control could require AT&T to complete the Separation and the Distribution and Discovery and AT&T to complete the Merger at a later time or not complete them at all. For a discussion of the conditions to the Separation and the Merger, see “The Transactions—Regulatory Approvals,” “The Merger Agreement—Conditions to the Merger” and “The Separation Agreement—Conditions to the Distribution.”

Q: Does the Merger Agreement contain an outside date which, once reached, allows a party to terminate?

A: Yes. Subject to specified qualifications and exceptions, either AT&T or Discovery may terminate the Merger Agreement at any time prior to the completion of the Merger if the Merger has not been completed by July 15, 2023. See “The Merger Agreement—Termination.”

Q: Does Discovery have to pay anything to AT&T if the Merger Agreement is terminated?

A: Depending on the circumstances for termination of the Merger Agreement, Discovery may have to pay AT&T a termination fee of $720.0 million (the “Discovery Termination Fee”). For a discussion of the circumstances under which the Discovery Termination Fee is payable by Discovery, see “The Merger Agreement—Termination Fees and Expenses Payable in Certain Circumstances.”

Q: Does AT&T have to pay anything to Discovery if the Merger Agreement is terminated?

A: Depending on the circumstances for termination of the Merger Agreement, AT&T may have to pay Discovery a termination fee of $1.77 billion (the “AT&T Termination Fee”). For a discussion of the circumstances under which the AT&T Termination Fee is payable by AT&T, see “The Merger Agreement—Termination Fees and Expenses Payable in Certain Circumstances.”

Q: Who can answer my questions about the Transactions or the Discovery special meeting?

A: If you have any questions about the Transactions or the Discovery special meeting or you would like to request additional documents, including copies of this proxy statement/prospectus and the enclosed proxy card, please contact the information agent, Innisfree, located at 501 Madison Avenue, 20th Floor, New York, NY 10022, at the telephone number (877) 750-0854 (toll-free) or (212) 750-5833 (banks and brokerage firms).

Q: Who is the transfer agent for Discovery capital stock and WBD common stock and the Exchange Agent for the Merger?

A: Computershare Trust Company, N.A. is the transfer agent for Discovery capital stock and WBD common stock and will be the exchange agent (the “Exchange Agent”) for the Merger.

Q: Where can I find more information about AT&T, Discovery, Spinco and the Transactions?

A: You can find out more information about AT&T, Discovery, Spinco and the Transactions by reading this proxy statement/prospectus and, with respect to AT&T and Discovery, from various sources described in “Where You Can Find More Information; Incorporation by Reference.”

Questions and Answers about the Discovery Special Meeting

Q: Why am I receiving this proxy statement/prospectus and the proxy materials?

A: Discovery is sending this proxy statement/prospectus and the proxy materials to its stockholders to help them decide how to vote their shares of Discovery voting stock and Discovery Series C-1 preferred stock with respect to the Transactions and other matters to be considered at the Discovery special meeting. Discovery is holding a special meeting of stockholders in order to obtain the stockholder approval necessary for the Charter Amendment and the Share Issuance in connection with the Transactions. Discovery stockholders will also be asked to approve, on an advisory (non-binding) basis, the “golden parachute” compensation payments that will or may be paid by Discovery to its named executive officers in connection with the Merger (the “‘Golden Parachute’ Compensation”).

This proxy statement/prospectus is being delivered to you as a proxy statement of Discovery and a prospectus of Discovery and Spinco in connection with the Transactions and AT&T’s offer to exchange. It is the proxy statement by which the Discovery Board is soliciting proxies from Discovery stockholders to vote at the Discovery special meeting, or at any adjournment or postponement of the Discovery special meeting, on the approval of the Charter Amendment, the Share Issuance and the “Golden Parachute” Compensation. In addition, it is the prospectus by which Discovery will issue shares of WBD common stock in the Transactions and the prospectus by which Spinco will issue shares of Spinco common stock in the Transactions.

As a Discovery stockholder, your vote is very important. You are encouraged to submit a proxy card or voting instruction card as soon as possible.

Q: What is “householding”?

A: To reduce the expense of delivering duplicate copies of this proxy statement/prospectus and the proxy materials to stockholders who may have more than one account holding Discovery voting stock or Discovery Series C-1 preferred stock but sharing the same address, Discovery has adopted a procedure approved by the SEC called “householding.” Under this procedure, certain holders of record of shares of Discovery voting stock or Discovery Series C-1 preferred stock who have the same address and last name will receive only one copy of this proxy statement/prospectus and any additional proxy materials that are delivered until such time as one or more of these stockholders notifies Discovery that they want to receive separate copies. Discovery stockholders who participate in householding will continue to have access to and utilize separate proxy voting instructions.

If you receive a single copy of this proxy statement/prospectus as a result of householding, and you would like to have separate copies of this proxy statement/prospectus mailed to you, please contact Discovery Investor Relations at 230 Park Avenue South, New York, New York 10003 (telephone number: (212) 548-5555). Discovery will promptly deliver, upon oral or written request, to you what you have requested. You can also contact Discovery Investor Relations at the address and telephone number above if you received multiple copies of this proxy statement/prospectus and would prefer to receive a single copy in the future, or if you would like to opt out of householding for future mailings.

Q: When and where will the Discovery special meeting be held?

A: The Discovery special meeting will be held online via live audio webcast at on at Eastern Time. There will not be a physical meeting location.

Q: How do I virtually attend the Discovery special meeting?

A: You may attend the Discovery special meeting live online by visiting . You will need the control number on your proxy card or voting instruction card to be able to vote or ask questions during the Discovery special meeting. Instructions on how to attend and participate online at the Discovery special meeting are posted at . If you are a Discovery stockholder as of the Discovery record date, you should enter your control number and follow the prompt to log in.

Online check-in will begin at Eastern Time on , and you should allow ample time for the online check-in proceedings. Technicians will be standing by and ready to assist you with any technical difficulties you may have accessing the virtual meeting starting at Eastern Time on . If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Discovery special meeting log-in page.

Q: Why is the Discovery special meeting a virtual, online meeting?

A: To support the health and well-being of Discovery’s stockholders, employees and directors, the Discovery special meeting will be a virtual meeting of stockholders where stockholders will participate by accessing a website using the internet. There will not be a physical meeting location. In light of the continuing public health and safety concerns related to COVID-19, Discovery believes that hosting a virtual meeting will facilitate stockholder attendance and participation at the Discovery special meeting by enabling stockholders to participate remotely from any location around the world. The Discovery special meeting will be governed by Discovery’s Rules of Conduct of Meeting, which will be posted at in advance of the meeting. Discovery has designed the virtual Discovery special meeting to provide the same rights and opportunities to participate as stockholders would have at an in-person meeting, including the right to vote and ask questions through the virtual meeting platform.

Q: How do I submit a question at the Discovery special meeting?

A: Discovery stockholders may submit questions at the Discovery special meeting by using the virtual meeting platform at . Once you have logged into the site using the control number on your proxy card or voting instruction card, you will be able to submit questions electronically via the virtual meeting platform.

Q: What are Discovery stockholders being asked to vote on?

A: At the Discovery special meeting, you will be asked to consider and vote on (1) an amendment and restatement of the Discovery charter to (a) reclassify and automatically convert the Discovery capital stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter into such number of shares of WBD common stock as set forth in the Merger Agreement,

(b) increase the authorized shares of WBD common stock to 10,800,000,000 shares, (c) increase the authorized shares of “blank check” preferred stock of WBD, par value $0.01 per share, to 1,200,000,000 shares, (d) declassify the WBD Board upon the election of directors at WBD’s third annual meeting of stockholders after the completion of the Merger and make certain related changes and (e) provide for certain other changes in connection with the amendment and restatement of the Discovery charter (collectively, the “Charter Amendment proposals”), (2) the issuance of shares of WBD common stock to Spinco stockholders in the Merger (the “Share Issuance proposal”) and (3) the “golden parachute” compensation payments that will or may be made by Discovery to its named executive officers in connection with the Merger on an advisory (non-binding) basis (the “‘Golden Parachute’ Compensation proposal”).

The approval of the Charter Amendment proposals and the Share Issuance proposal is a condition to the obligations of AT&T and Discovery to complete the Merger. The approval of the “Golden Parachute” Compensation proposal is not a condition to the obligations of Discovery to complete the Merger.

Discovery does not expect any other business to be conducted at the Discovery special meeting.

Q: Why are Discovery stockholders being asked to consider and vote on a proposal to approve, on an advisory (non-binding) basis, the “Golden Parachute” Compensation?

A: The SEC has adopted rules that require Discovery to seek an advisory (non-binding) vote on “golden parachute” compensation. “Golden Parachute” Compensation refers to certain compensation that is tied to or based on the Merger and that will or may be paid by Discovery to its named executive officers in connection with the Merger.

Q: What will happen if the “Golden Parachute” Compensation proposal is not approved at the Discovery special meeting?

A: Approval of the “Golden Parachute” Compensation proposal is not a condition to completion of the Merger. Accordingly, Discovery stockholders may vote against the “Golden Parachute” Compensation proposal and vote in favor of the Charter Amendment proposals and the Share Issuance proposal. The “Golden Parachute” Compensation proposal vote is an advisory (non-binding) vote. If the Merger is completed, the compensation described in the “Golden Parachute” Compensation proposal may be paid to Discovery’s named executive officers to the extent payable in accordance with the terms of their respective compensation agreements and contractual arrangements even if Discovery stockholders do not approve the “Golden Parachute” Compensation proposal.

Q: Does the Discovery Board recommend that Discovery stockholders approve the Charter Amendment proposals, the Share Issuance proposal and the “Golden Parachute” Compensation proposal?

A: Yes, the Discovery Board recommends that you vote “FOR” the Charter Amendment proposals, “FOR” the Share Issuance proposal and “FOR” the “Golden Parachute” Compensation proposal. The Discovery Board carefully evaluated the Transactions in consultation with Discovery management and Discovery’s advisors, and, on May 16, 2021, the Discovery Board approved the Transaction Documents and the Transactions contemplated thereby, including the Merger, the Charter Amendment and the Share Issuance, and determined that the Transaction Documents and the Transactions are advisable, fair to and in the best interests of Discovery and its stockholders. All members of the Discovery Board were in attendance at the meeting, and the Discovery Board unanimously recommended that Discovery stockholders vote “FOR” the Charter Amendment proposals and “FOR” the Share Issuance proposal. See “The Transactions—Recommendation of the Discovery Board; Discovery’s Reasons for the Transactions.” In addition, the Discovery Board unanimously recommended that Discovery stockholders vote “FOR” the “Golden Parachute” Compensation proposal.

Q: Who is entitled to vote at the Discovery special meeting?

A: The Discovery Board has fixed the close of business on as the record date for the Discovery special meeting (the “Discovery record date”). You are entitled to receive notice of, and vote at, the Discovery special meeting if you owned shares of Discovery voting stock or Discovery Series C-1 preferred stock as of the Discovery record date, provided that those shares remain outstanding on the date of the Discovery special meeting.

Q: What constitutes a quorum for the Discovery special meeting?

A: The presence, in person or by properly executed proxy, of the holders of a majority in voting power of (1) the outstanding shares of Discovery Series B common stock, voting as a class, (2) the outstanding shares of Discovery Series A-1 preferred stock, voting as a class, (3) the outstanding shares of Discovery Series C-1 preferred stock, voting as a class, and (4) the outstanding shares of Discovery voting stock, voting together as a single class, will constitute a quorum. Discovery stockholders present virtually during the Discovery special meeting will be considered present in person at the Discovery special meeting. If a quorum is not present, the Discovery special meeting will be adjourned until a quorum is obtained.

If you hold shares of Discovery capital stock entitled to vote at the Discovery special meeting through a bank, brokerage firm or other nominee, you may instruct your bank, brokerage firm or other nominee to vote your shares by following the instructions that the bank, brokerage firm or nominee provides to you. If you do not provide voting instructions to your brokerage firm, your shares of Discovery capital stock entitled to vote at the Discovery special meeting will not be voted and will not be treated as present for purposes of establishing a quorum.

Q: What Discovery stockholder vote is required for the approval of the proposals at the Discovery special meeting?

A: Approval of each of the Charter Amendment proposals requires the affirmative vote of (1) at least 75% of the outstanding shares of Discovery Series B common stock, voting as a class, (2) at least a majority of the outstanding shares of Discovery Series A-1 preferred stock, voting as a class, (3) at least a majority of the outstanding shares of Discovery Series C-1 preferred stock, voting as a class, and (4) at least a majority of the combined voting power of the outstanding shares of Discovery voting stock, voting together as a single class, present in person or represented by proxy at the Discovery special meeting and entitled to vote on such proposal.

Approval of the Share Issuance proposal and approval, on an advisory (non-binding) basis, of the “Golden Parachute” Compensation proposal each requires the affirmative vote of at least a majority of the combined voting power of the outstanding shares of Discovery voting stock, voting together as a single class, present in person or represented by proxy at the Discovery special meeting and entitled to vote on such proposal.

Discovery has entered into agreements with certain of its stockholders to vote in favor of the Charter Amendment proposals and the Share Issuance proposal. See “Other Agreements Related to the Transactions—Malone Voting Agreement,” “Other Agreements Related to the Transactions—A/N Voting Agreement” and “Other Agreements Related to the Transactions—Consent Agreement.”

Q: How many votes do Discovery stockholders have at the Discovery special meeting?

A: As of the Discovery record date, there were , and issued and outstanding shares of Discovery Series A common stock, Discovery Series B common stock and Discovery Series A-1 preferred stock, respectively, representing %, % and % of the aggregate voting power of the shares of Discovery voting stock, respectively, entitled to vote together as a single class on each of the Charter Amendment proposals, the Share Issuance proposal and the “Golden Parachute” Compensation proposal. There were issued and outstanding shares of Discovery Series C-1 preferred stock entitled to vote as a single class on each of the Charter Amendment proposals.

As of the Discovery record date, approximately %, %, % and % of the issued and outstanding shares of Discovery Series A common stock, Discovery Series B common stock, Discovery Series A-1 preferred stock and Discovery Series C-1 preferred stock, respectively, were held by Discovery’s directors and executive officers and their affiliates, representing approximately % of the aggregate voting power of the shares of Discovery voting stock entitled to vote together as a single class on each of the Charter Amendment proposals, the Share Issuance proposal and the “Golden Parachute” Compensation proposal. Discovery currently expects that Discovery’s directors and executive officers and their affiliates will vote their shares of Discovery voting stock in favor of the Charter Amendment proposals and the Share Issuance proposal, although only Dr. Malone has entered into an agreement obligating him to do so. Additionally, Discovery currently expects that Discovery’s directors and executive officers and their affiliates will vote their shares of Discovery voting stock in favor of the “Golden Parachute” Compensation proposal.

Q: Are any Discovery stockholders already committed to vote in favor of any of the proposals to be considered and voted on at the Discovery special meeting?

A: Yes. Dr. Malone and certain affiliates of Dr. Malone entered into a voting agreement with Discovery, AT&T and Spinco (the “Malone Voting Agreement”), pursuant to which Dr. Malone and his affiliates have agreed to vote their shares of Discovery Series A common stock and Discovery Series B common stock to approve the Charter Amendment proposals and the Share Issuance proposal. As of the Discovery record date, these shares represent approximately % and % of the issued and outstanding shares of Discovery Series A common stock and Discovery Series B common stock, respectively, which is approximately % of the aggregate voting power of the shares of Discovery voting stock entitled to vote together as a single class on each of the Charter Amendment proposals and the Share Issuance proposal. The Malone Voting Agreement is attached to this proxy statement/prospectus as Annex C and is incorporated by reference into this proxy statement/prospectus. See “Other Agreements Related to the Transactions—Malone Voting Agreement.”

Advance/Newhouse entered into a voting agreement with Discovery, AT&T and Spinco (the “A/N Voting Agreement”), pursuant to which Advance/Newhouse has agreed to vote its shares of Discovery Series A-1 preferred stock and Discovery Series C-1 preferred stock to approve the Charter Amendment proposals and the Share Issuance proposal. As of the Discovery record date, these shares represent all of the issued and outstanding shares of Discovery Series A-1 preferred stock, which is approximately % of the aggregate voting power of the shares of Discovery voting stock entitled to vote together as a single class on each of the Charter Amendment proposals and the Share Issuance proposal, and all of the issued and outstanding shares of Discovery Series C-1 preferred stock entitled to vote as a single class on each of the Charter Amendment proposals. The A/N Voting Agreement is attached to this proxy statement/prospectus as Annex D and is incorporated by reference into this proxy statement/prospectus. See “Other Agreements Related to the Transactions—A/N Voting Agreement.”

In addition, Advance/Newhouse entered into a consent agreement with Discovery (the “Consent Agreement”), pursuant to which Advance/Newhouse agreed to deliver an irrevocable written consent to Discovery consenting to, approving and adopting the Merger Agreement and any actions required thereby, including the Charter Amendment and the Share Issuance. Such written consent (the “Consent”) was delivered in accordance with the affirmative vote or written consent required pursuant to the Certificate of Designation of Series A-1 Convertible Participating Preferred Stock of Discovery for any Special A-1 Class Vote Matter (as

such term is defined therein). As of the Discovery record date, Advance/Newhouse holds all of the issued and outstanding shares of Discovery Series A-1 preferred stock. The Consent Agreement is attached to this proxy statement/prospectus as Annex E and is incorporated by reference into this proxy statement/prospectus. See “Other Agreements Related to the Transactions—Consent Agreement.”

Q: What if my bank, brokerage firm or other nominee holds my shares in “street name”?

A: If you hold your shares in “street name” through a bank, brokerage firm or other nominee, you should have received access to this proxy statement/prospectus from your bank, brokerage firm or other holder of record with instructions on how to instruct the holder of record to vote your shares. A brokerage firm cannot vote shares held in “street name” on matters designated as “non-routine” unless the brokerage firm receives voting instructions from the “street name” holder. It is expected that all proposals to be voted on at the Discovery special meeting are “non-routine” matters. As a result, if you are a “street name” holder of shares of Discovery capital stock entitled to vote at the Discovery special meeting and you do not provide voting instructions to your brokerage firm, your shares will not be voted and will not be treated as present for purposes of establishing a quorum. This will have the effect of a vote “AGAINST” the Charter Amendment proposals for purposes of the separate class votes by the Discovery Series B common stock, the Discovery Series A-1 preferred stock and the Discovery Series C-1 preferred stock, and, assuming a quorum is present at the Discovery special meeting, will have no effect on the Charter Amendment proposals, the Share Issuance proposal or the “Golden Parachute” Compensation proposal when the Discovery voting stock votes together as a single class.

Q: If I am a Discovery stockholder, how do I vote?

A: Via the Internet or Phone

If you are a holder of Discovery capital stock entitled to vote at the Discovery special meeting as of the Discovery record date, telephone and internet voting are available 24 hours a day through 11:59 p.m. (Eastern Time) on . If you are located in the United States or Canada and are a Discovery holder of record as of the Discovery record date, you can vote your Discovery capital stock entitled to vote by calling toll-free 1-800-690-6903. Whether you are a Discovery holder of record or a beneficial owner, you can also vote your Discovery capital stock entitled to vote on the internet at www.proxyvote.com.

Both the telephone and internet voting systems have easy-to-follow instructions on how you may vote your shares and allow you to confirm that the system has properly recorded your vote. If you are voting your Discovery capital stock by telephone or internet, you should have on hand when you call or access the website, as applicable, the Notice of Special Meeting, the proxy card or voting instruction card. If you vote by telephone or internet, you do not need to return your proxy card to us.

By Mail

If you hold shares of Discovery capital stock entitled to vote at the Discovery special meeting directly in your name as a holder of record (that is, if your shares of Discovery capital stock are registered in your name with Computershare Trust Company, N.A., Discovery’s transfer agent), you will need to sign, date and mark your proxy card and return it using the postage-paid return envelope provided. Discovery must receive your proxy card no later than the close of business on .

If you hold shares of Discovery capital stock entitled to vote at the Discovery special meeting in “street name,” meaning through a bank, brokerage firm, nominee or other holder of record, to vote by mail, you will need to sign, date and mark the voting instruction form provided by your bank, brokerage firm, nominee or other holder of record with these materials and return it in the postage-paid return envelope provided. Your bank, brokerage firm, nominee or other holder of record must receive your voting instruction form in sufficient time to vote your shares.

In Person (Virtually)

While holders of Discovery capital stock entitled to vote at the Discovery special meeting are encouraged to vote by proxy, you also have the option of voting your shares of Discovery capital stock entitled to vote in person at the Discovery special meeting. In order to vote online at the Discovery special meeting, you will need the control number on your proxy card or voting instruction card. If your shares of Discovery capital stock entitled to vote are registered directly in your name with Discovery’s transfer agent, you are considered the holder of record with respect to such shares of Discovery capital stock and you have the right to attend the Discovery special meeting and vote in person, subject to compliance with the procedures described below. If your shares of Discovery capital stock entitled to vote are held in a brokerage account or by a bank or other nominee, you are the beneficial owner of such Discovery capital stock. As such, in order to vote in person, you must follow the instructions provided by your bank, brokerage firm or nominee.

Q: What do I do if I receive more than one set of voting materials?

A: You may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate instruction card for each brokerage account in which you hold shares. In addition, if you are a holder of record and your shares are held in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card you receive, or submit each proxy or voting instruction by telephone or internet by following the instructions on your proxy cards or the voting instruction cards.

Q: What if I fail to vote or abstain?

A: An abstention occurs when a holder of shares of Discovery capital stock entitled to vote at the Discovery special meeting attends the Discovery special meeting in person and does not vote or returns a proxy with an “abstain” vote. If you submit a proxy card on which you indicate that you abstain from voting, your abstention will count as a vote “AGAINST” the applicable proposal.

If you are a holder of shares of Discovery capital stock entitled to vote at the Discovery special meeting and you do not attend the Discovery special meeting in person or return a proxy, or if you hold your shares in “street name” and you do not provide voting instructions to your brokerage firm, your shares will not be voted and will not be treated as present for purposes of establishing a quorum. This will have the effect of a vote “AGAINST” the Charter Amendment proposals for purposes of the separate class votes by the Discovery Series B common stock, the Discovery Series A-1 preferred stock and the Discovery Series C-1 preferred stock, and, assuming a quorum is present at the Discovery special meeting, will have no effect on the Charter Amendment proposals, the Share Issuance proposal or the “Golden Parachute” Compensation proposal when the Discovery voting stock votes together as a single class.

Q: What will happen if I sign and return my proxy card or voting instruction card without indicating how to vote?

A: If you sign and return your proxy card or voting instruction card without indicating how to vote on any particular proposal, the Discovery capital stock entitled to vote at the Discovery special meeting represented by your proxy will be voted as recommended by the Discovery Board with respect to that proposal.

Q: What happens if I sell my shares of Discovery capital stock after the Discovery record date but before the Discovery special meeting?

A: The Discovery record date (the close of business on ) is earlier than the date of the Discovery special meeting and earlier than the date that the Merger is expected to be completed. If you sell or otherwise

transfer your shares of Discovery capital stock entitled to vote at the Discovery special meeting after the Discovery record date but before the date of the Discovery special meeting, you will retain your right to vote at the Discovery special meeting.

Q: May I change my vote after I have delivered my proxy card or voting instruction card?

A: Yes. Any Discovery stockholder giving a proxy has the power to revoke it at any time before it is exercised.

If you are a Discovery stockholder, you may change or revoke your vote on the Charter Amendment proposals, the Share Issuance proposal and the “Golden Parachute” Compensation proposal by telephone or over the internet (if you originally voted by telephone or over the internet) by voting in person at the Discovery special meeting (if you are entitled to do so) or by delivering a signed proxy revocation or a new signed proxy with a later date to: Discovery, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Any signed proxy revocation or new signed proxy must be received before the start of the Discovery special meeting.

Attendance at the Discovery special meeting alone will not revoke any proxy. If not revoked, the proxy will be voted at the Discovery special meeting in accordance with your instructions.

If your shares are held in an account at a bank, brokerage firm or other nominee and you have delivered your voting instruction card to your bank, brokerage firm or other nominee, you should contact your bank, brokerage firm or other nominee to change your vote.

Q: How do I obtain the voting results from the Discovery special meeting?

A: Preliminary voting results will be announced at the Discovery special meeting. In addition, within four business days following certification of the final voting results, Discovery intends to file the final voting results of the Discovery special meeting with the SEC on a Current Report on Form 8-K.

Q: Whom should I contact if I have any questions about the proxy materials or voting?

A: If you have any questions about the proxy materials or if you need assistance submitting your proxy card or voting instruction card or voting your shares or need additional copies of this proxy statement/prospectus or the enclosed proxy card, you should contact the information agent or proxy solicitation agent for Discovery:

Innisfree M&A Incorporated

501 Madison Avenue

20th Floor

New York, NY 10022

(877) 750-0854 (call toll-free)

(212) 750-5833 (banks and brokerage firms)

If your shares are held “street name,” through a bank, brokerage firm or other nominee, you should contact such bank, brokerage firm or other nominee if you need to obtain voting instruction cards or have questions on how to vote your shares.

SUMMARY

The following summary contains certain information described in more detail elsewhere in this proxy statement/prospectus. It does not contain all the details concerning the Transactions, including information that may be important to you. To better understand the Transactions, please read carefully and in its entirety this proxy statement/prospectus, including the annexes hereto, and the documents incorporated by reference herein, as well as the registration statement of which this proxy statement/prospectus forms a part, including the exhibits to the registration statement. See “Where You Can Find More Information; Incorporation by Reference.”

Parties to the Transactions

Discovery, Inc.

Discovery is a global media company that provides content across multiple distribution platforms, including linear platforms such as pay-television (“pay-TV”), free-to-air and broadcast television, authenticated GO applications, digital distribution arrangements, content licensing arrangements and next generation direct-to-consumer (“DTC”) subscription products, including discovery+, the definitive real-life subscription service. As one of the world’s largest pay-TV programmers, as of December 31, 2020, Discovery provided original and purchased content and live events to approximately 3.7 billion cumulative subscribers and viewers worldwide through networks that it wholly or partially owns. Discovery distributes customized content in the United States and over 220 other countries and territories in nearly 50 languages. Discovery has an extensive library of content and owns most rights to its content and footage, which enables Discovery to leverage its library to quickly launch brands and services into new markets and on new platforms. Discovery’s content can be re-edited and updated in a cost-effective manner to provide topical versions of subject matter that can be utilized around the world on a variety of platforms.

Discovery Series A common stock, Discovery Series B common stock and Discovery Series C common stock are listed on Nasdaq under the symbols “DISCA,” “DISCB” and “DISCK,” respectively.

Discovery’s principal executive office is located at 230 Park Avenue South, New York, New York 10003 (telephone number: (212) 548-5555).

This proxy statement/prospectus incorporates important business and financial information about Discovery from other documents that are not included in or delivered with this proxy statement/prospectus. For a more detailed description of Discovery’s business and operations, see Discovery’s Annual Report on Form 10-K for the year ended December 31, 2020 and Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2021, June 30, 2021 and September 30, 2021, each of which is incorporated by reference herein. See “Where You Can Find More Information; Incorporation by Reference.”

WBD’s Business after the Transactions

The combination of Discovery’s and the WarnerMedia Business’s robust portfolios of entertainment, kids, news and sports content is expected to position WBD as a stronger global competitor in streaming and digital entertainment with favorable prospects in the global DTC race, and improve the overall growth profile for WBD in the future. The Transactions bring together the complementary brands of Discovery and the WarnerMedia Business to the benefit of consumers. The Transactions will combine the WarnerMedia Business’s storied content library of popular and valuable intellectual property with Discovery’s global footprint, trove of local-language content and deep regional expertise across more than 220 countries and territories. Discovery expects this broad, worldwide portfolio of brands, coupled with its DTC potential and the attractiveness of the combined assets, to result in increased market penetration globally.

Drake Subsidiary, Inc.

Merger Sub was formed specifically for the purpose of completing the Merger. Merger Sub has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the Transactions.

Merger Sub’s principal executive office is located at 230 Park Avenue South, New York, New York 10003 (telephone number: (212) 548-5555).

AT&T Inc.

AT&T is a Delaware corporation formed in 1983 (formerly, SBC Communications Inc.) as one of several regional holding companies created to hold AT&T Corp.’s (“ATTC”) local telephone companies. On January 1, 1984, AT&T was spun off from ATTC pursuant to an antitrust consent decree, becoming an independent publicly traded telecommunications services provider. At formation, AT&T primarily operated in five southwestern states. Following its formation, AT&T has expanded its footprint and operations by acquiring various businesses. With approximately 180,000 employees worldwide (excluding employees of the WarnerMedia Business) as of October 1, 2021, AT&T is a leading provider of telecommunications, media and technology services globally.

AT&T’s principal executive offices are located at 208 S. Akard St., Dallas, Texas, 75202, and its telephone number is (210) 821-4105.

This proxy statement/prospectus incorporates important business and financial information about AT&T from other documents that are not included in or delivered with this proxy statement/prospectus. For a more detailed description of AT&T’s business, see AT&T’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021 and Annual Report on Form 10-K for the year ended December 31, 2020, each as filed with the SEC, and Current Report on Form 8-K, as filed with the SEC on June 21, 2021 (which updates AT&T’s audited financial statements contained in its Annual Report on Form 10-K for the fiscal year ended December 31, 2020), each of which is incorporated by reference into this proxy statement/prospectus. See “Where You Can Find More Information; Incorporation by Reference.”

Magallanes, Inc.

Spinco was formed specifically for the purpose of effecting the Separation. Spinco has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the Transactions. In connection with the Transactions, Spinco has entered into several arrangements which will provide financing to fund the Special Cash Payment, the Additional Amount and the other Transactions and to pay related transaction fees and expenses. For more information about financing of the Transactions, see “Debt Financing.”

Spinco is a holding company. In the Separation, AT&T will transfer the WarnerMedia Assets that are not already owned by members of the Spinco Group to members of the Spinco Group and members of the Spinco Group will assume the WarnerMedia Liabilities that are not already owed by or otherwise the responsibility of members of the Spinco Group, and AT&T will cause the members of the Spinco Group to transfer Excluded Assets (as defined herein) that are not already owned by members of the AT&T Group to members of the AT&T Group and the AT&T Group will assume the Excluded Liabilities (as defined herein) that are not already owed by or otherwise the responsibility of members of the AT&T Group. Thereafter, AT&T will transfer all of the equity interests in each member of the Spinco Group (i.e., such subsidiary of AT&T holding assets and liabilities constituting a portion of the WarnerMedia Business), directly or indirectly, to Spinco. In exchange, Spinco will:

(1)(a) issue to AT&T the Spinco Debt Securities that satisfy the Par Exchange Requirement, (b) distribute to AT&T all or a portion of the cash proceeds from the borrowing by Spinco under the Spinco Financing Agreements and/or use all or a portion of the cash proceeds of such borrowing to purchase assets of the WarnerMedia Business from AT&T or (c) undertake a combination of the actions described in (a) and (b) such that AT&T has received, in the aggregate, the Additional Amount of approximately $13.0 billion, subject to adjustment, (2) issue to AT&T shares of Spinco common stock and (3) make the Special Cash Payment to AT&T.

Spinco’s principal executive office is located at 208 S. Akard St., Dallas, Texas, 75202, and its telephone number is (210) 821-4105.

The Transactions

Overview

On May 17, 2021, Discovery, AT&T, Spinco and Merger Sub entered into definitive agreements, pursuant to which and subject to the terms and conditions therein, (1) AT&T will transfer the WarnerMedia Business to Spinco (the Separation), (2) Spinco will (a) make a cash distribution to AT&T equal to approximately $30.0 billion, subject to adjustment, including for the approximately $1.6 billion of existing debt of the WarnerMedia Business to be assumed by the Spinco Group, net working capital and other adjustments (the Special Cash Payment), and (b)(i) issue to AT&T the Spinco Debt Securities that satisfy the Par Exchange Requirement, (ii) distribute to AT&T all or a portion of the cash proceeds from the borrowing by Spinco under the Spinco Financing Agreements and/or use all or a portion of the cash proceeds of such borrowing to purchase assets of the WarnerMedia Business from AT&T or (iii) undertake a combination of the actions described in (2)(b)(i) and (2)(b)(ii) such that AT&T has received, in the aggregate, the Additional Amount of approximately $13.0 billion, subject to adjustment, (3) AT&T will distribute to its stockholders all of the issued and outstanding shares of Spinco common stock in a distribution that will, at AT&T’s election, take place either by way of (a) a pro rata distribution of Spinco common stock to AT&T stockholders or (b) an exchange offer followed by a pro rata distribution of any shares of Spinco common stock remaining if such exchange offer is not fully subscribed because the number of shares of AT&T common stock tendered and accepted does not result in all shares of Spinco common stock being distributed in the exchange offer (the Distribution), (4) Discovery will amend and restate the Discovery charter to, among other things, change its name to Warner Bros. Discovery, Inc. and reclassify and automatically convert each share of Discovery capital stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter into such number of shares of WBD common stock as set forth in the Merger Agreement (the Reclassification) and (5) Merger Sub will merge with and into Spinco, with Spinco as the surviving corporation (the Merger) and as a wholly owned subsidiary of WBD.

In the Merger, each issued and outstanding share of Spinco common stock (except for shares of Spinco common stock held by Spinco as treasury stock or by any other member of the Spinco Group, which will be canceled and cease to exist and no consideration will be delivered in exchange therefor) will automatically convert into the right to receive a number of shares of WBD common stock. When the Merger is completed, holders (or, if such holders exchange all of their shares of AT&T common stock in the Exchange Offer, also former holders) of AT&T common stock that received shares of Spinco common stock in the Distribution will own approximately 71% of the outstanding shares of WBD common stock on a fully diluted basis and holders of Discovery capital stock as of immediately prior to the Reclassification and the Merger will own approximately 29% of the outstanding shares of WBD common stock on a fully diluted basis, in each case, excluding any overlaps in the pre-Merger AT&T and Discovery stockholder bases, as described under “The Transactions—Calculation of the Merger Consideration.” The Distribution and the Merger are a Reverse Morris Trust-type transaction and are expected to be tax-free to AT&T stockholders for U.S. federal income tax purposes, except to

the extent that cash is paid to AT&T stockholders in lieu of fractional shares in the Distribution or the Merger. The Separation, Special Cash Payment, Distribution, Reclassification, Merger, payment of the Additional Amount and other transactions contemplated by the Transaction Documents are collectively referred to herein as the Transactions.

The definitive agreements entered into in connection with the Transactions include (1) the Merger Agreement, (2) the Separation Agreement, (3) the Employee Matters Agreement, (4) the Tax Matters Agreement, (5) the A/N Voting Agreement, (6) the Malone Voting Agreement and (7) the Consent Agreement. In addition, AT&T and Discovery and certain of their respective affiliates, including Spinco, will enter into other Ancillary Agreements in connection with the Transactions. These agreements, which are described in greater detail in “Other Agreements Related to the Transactions,” will govern the relationship among AT&T and Discovery and their respective affiliates, including Spinco, after the Transactions.

The Distribution will be conducted through, at AT&T’s election, either (1) a pro rata distribution of Spinco common stock to AT&T stockholders or (2) the Exchange Offer and a potential Clean-Up Spin-Off, if necessary. This proxy statement/prospectus has been prepared under the assumption that the shares of Spinco common stock will be distributed to AT&T stockholders pursuant to the Exchange Offer. Based on market conditions prior to the Closing, AT&T will determine whether the shares of Spinco common stock will be distributed to AT&T stockholders in a pro rata distribution or the Exchange Offer and a potential Clean-Up Spin-Off, if necessary.

Following the Transactions, WBD will own and operate the WarnerMedia Business through Spinco and will also continue Discovery’s current businesses. Discovery will use reasonable best efforts to cause the WBD common stock issuable in the Transactions to be authorized for listing on Nasdaq under the symbol “WBD.”

Transaction Steps

Below is a step-by-step list illustrating the material events relating to the Separation, the Distribution, the Reclassification and the Merger. Each of these events, as well as any conditions to their completion, is discussed in more detail elsewhere in this proxy statement/prospectus. Steps #1, #2 and #3 described below may not, and are not required pursuant to the Transaction Documents to, occur chronologically.

Step #1—The Separation. Prior to the Distribution and the Merger, AT&T will convey to Spinco or one or more subsidiaries of Spinco certain assets and liabilities constituting the WarnerMedia Business and will cause any applicable subsidiary of AT&T to convey to AT&T or its designated subsidiary (other than Spinco or any other member of the Spinco Group) certain excluded assets and excluded liabilities in order to separate the WarnerMedia Business, in each case, as set forth in and subject to the terms and conditions of the Separation Agreement. Thereafter, AT&T will transfer all of the equity interests in each of the subsidiaries of AT&T holding WarnerMedia Assets and WarnerMedia Liabilities, and constituting the WarnerMedia Business, directly or indirectly, to Spinco.

Securities Exchange. Following the Securities Exchange, such investment bank(s) or their affiliates are expected to sell the Spinco Debt Securities to third-party investors.

Step #3—Special Cash Payment. Prior to the effective time of the Merger, and as a condition to the Distribution, Spinco will make the Special Cash Payment to AT&T, which is a cash distribution to AT&T equal to approximately $30.0 billion, subject to adjustments including for the approximately $1.6 billion of existing debt of the WarnerMedia Business to be assumed by the Spinco Group, net working capital and other adjustments. See “The Separation Agreement—The Separation— Special Cash Payment, Payment of the Additional Amount and Post-Closing Adjustments” for further description of adjustments to the Special Cash Payment.

Step #4—Issuance of Spinco common stock. Prior to the Distribution, Spinco will issue to AT&T a number of shares of Spinco common stock such that the number of shares of Spinco common stock issued and outstanding at the time of the Distribution is equal to the number of shares of WBD common stock to be issued to the stockholders of Spinco in the Share Issuance.

Step #5—The Distribution; Exchange Offer and Clean-Up Spin-Off. On the Closing Date, AT&T will distribute 100% of the shares of Spinco common stock to AT&T stockholders by, at AT&T’s election, either (1) a pro rata distribution of Spinco common stock to AT&T stockholders or (2) the Exchange Offer and a potential Clean-Up Spin-Off, if necessary. Assuming that AT&T elects to undertake the Distribution by way of the Exchange Offer, AT&T will offer to its stockholders the option to exchange all or a portion of their shares of AT&T common stock for shares of Spinco common stock. Immediately following the Exchange Offer, the shares of Spinco common stock remaining if the Exchange Offer is not fully subscribed (because the number of shares of AT&T common stock tendered and accepted in the Exchange Offer results in fewer than all of the shares of Spinco common stock being exchanged) will be distributed in a Clean-Up Spin-Off on a pro rata basis to AT&T stockholders as of the Distribution record date, other than in respect of any shares tendered and accepted in the Exchange Offer. Any AT&T stockholder who validly tenders (and does not properly withdraw) shares of AT&T common stock for shares of Spinco common stock and whose shares are accepted in the Exchange Offer will waive their rights with respect to such shares to receive, and forfeit any rights to, shares of Spinco common stock distributed on a pro rata basis to AT&T stockholders in a potential Clean-Up Spin-Off. See “The Separation Agreement—The Distribution.”

immediately prior to the effective time of the WBD charter will be reclassified and automatically converted into one share of WBD common stock, (3) each share of Discovery Series C common stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter will be reclassified and automatically converted into one share of WBD common stock, (4) each share of Discovery Series A-1 preferred stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter will be reclassified and automatically converted into 13.11346315 shares of WBD common stock and (5) each share of Discovery Series C-1 preferred stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter will be reclassified and automatically converted into such number of shares of WBD common stock as the number of shares of Discovery Series C common stock such share of Discovery Series C-1 preferred stock would have been convertible into immediately prior to the effective time of the WBD charter, which, as of September 30, 2021, would have been 19.3648 shares of WBD common stock.

The foregoing are subject to certain conditions to their completion. See “The Separation Agreement—Conditions to the Separation,” “The Separation Agreement—Conditions to the Distribution,” and “The Merger Agreement—Conditions to the Merger.”

Key Terms of the Merger Agreement

Calculation of the Merger Consideration

The Merger Agreement provides that, at the effective time of the Merger, each issued and outstanding share of Spinco common stock immediately prior to the effective time of the Merger will automatically convert at the effective time of the Merger into the right to receive a number of shares of WBD common stock such that each holder of record of shares of Spinco common stock immediately prior to the effective time of the Merger will have the right to receive, in the aggregate, a number of shares of WBD common stock (the “Merger Consideration”) equal to the product of (1) the total number of shares of Spinco common stock held of record by such holder immediately prior to the effective time of the Merger multiplied by (2) the exchange ratio (the “Merger exchange ratio”), provided that each holder will receive a cash payment in lieu of fractional shares of WBD common stock. Each share of Spinco common stock that is held by Spinco as treasury stock or by any other member of the Spinco Group will be canceled at the effective time of the Merger. Under the Merger Agreement, the Merger exchange ratio means (1)(a) the number of shares WBD common stock outstanding as of immediately prior to the effective time of the Merger on a fully diluted, as-converted (including as a result of the Reclassification) and as-exercised basis in accordance with the treasury stock method multiplied by (b) the quotient of 71 divided by 29 divided by (2) the number of shares of Spinco common stock outstanding immediately prior to the effective time of the Merger, subject to the adjustments set forth in the Merger Agreement. The calculation of the Merger Consideration as set forth in the Merger Agreement is expected to

result in Spinco stockholders immediately prior to the Merger collectively holding approximately 71% of the outstanding shares of WBD common stock on a fully diluted basis immediately following the Merger. See “The Merger Agreement—Merger Consideration.”

No fractional shares of WBD common stock will be issued upon the conversion of shares of Spinco common stock in connection with the Merger. All fractional shares of WBD common stock that a holder of Spinco common stock would otherwise be entitled to receive pursuant to the Merger will be aggregated by the Exchange Agent. The Exchange Agent will cause the whole shares obtained thereby to be sold in the open market or otherwise as reasonably directed by Discovery, in each case at then-prevailing market prices, as promptly as reasonably practicable and in no case later than ten business days after the Merger. The Exchange Agent will make available the net proceeds thereof, after deducting any required withholding taxes and brokerage charges, commissions and transfer taxes, on a pro rata basis, without interest, as soon as practicable to the holders of Spinco common stock that would otherwise be entitled to receive such fractional shares of WBD common stock pursuant to the Merger.

Conditions to the Merger

Each party’s obligation to complete the Merger is subject to the satisfaction or waiver at or prior to the Closing of certain conditions. Discovery, on the one hand, and AT&T, on the other hand, may waive the satisfaction of the conditions to their (and Merger Sub’s and Spinco’s, respectively) respective obligations to complete the Merger. For a description of the respective conditions to each party’s obligation to complete the Merger, see “The Merger Agreement—Conditions to the Merger.”

Termination

The Merger Agreement may be terminated and the Merger and the other Transactions may be abandoned at any time prior to the effective time of the Merger by mutual written consent of AT&T and Discovery. In addition, the Merger Agreement may be terminated and the Merger may be abandoned by either AT&T or Discovery under specific circumstances. For a description of the circumstances under which the Merger Agreement may be terminated and the Merger may be abandoned, see “The Merger Agreement—Termination.”

Termination Fees and Expenses Payable in Certain Circumstances

The Merger Agreement provides that, upon termination of the Merger Agreement under specified circumstances, a termination fee of $720.0 million may be payable by Discovery to AT&T and a termination fee of $1.77 billion may be payable by AT&T to Discovery. For a description of the circumstances under which Discovery or AT&T may need to pay their respective termination fees, see “The Merger Agreement—Termination Fees and Expenses Payable in Certain Circumstances.”

In addition, if the Merger Agreement has been terminated, all costs and expenses incurred in connection with the Merger Agreement and the Transactions shall be paid by the party incurring such costs and expenses; provided that (1) if the Merger Agreement is terminated by Discovery pursuant to the AT&T Breach Termination Right (as defined herein), the fees and expenses related to the Financing (the “Commitment Fees”) (including fees for prepayment in respect of any incurred Financing) shall be borne entirely by AT&T, (2) if the Merger Agreement is terminated by AT&T pursuant to the Discovery Breach Termination Right (as defined herein), the Commitment Fees (including fees for prepayment in respect of any incurred Financing) shall be borne entirely by Discovery and (3) if the Merger Agreement is otherwise terminated by either Discovery or AT&T, the Commitment Fees (including fees for prepayment in respect of any incurred Financing) shall be borne 71% by AT&T and 29% by Discovery.

Debt Financing

On May 17, 2021, in connection with the entry into the Separation Agreement and the Merger Agreement, Spinco entered into a commitment letter (as it may be amended from time to time, the “Commitment Letter”), under which JPMorgan Chase Bank, N.A., Goldman Sachs Bank, USA, Goldman Sachs Lending Partners LLC and certain other financial institutions (collectively, the “Commitment Parties”) committed to provide to Spinco $41.5 billion in aggregate principal amount of senior unsecured bridge term loans (the “Bridge Loans”) in two tranches, a $31.5 billion tranche (“Tranche 1”) and a $10.0 billion tranche (“Tranche 2”), such commitments to be reduced by, among other things, (1) the amount of net cash proceeds received by Spinco (and, following the completion of the Merger, WBD) from certain equity and debt issuances, (2) the amount of net cash proceeds received by Spinco (and, following the completion of the Merger, WBD) from certain non-ordinary course dispositions of assets, (3) term loan commitments under certain qualifying term loan facilities and (4) certain financings in connection with the Securities Exchange. The proceeds of any funded Bridge Loans will be used by Spinco on the Closing Date to finance, in part, the Special Cash Payment and the Additional Amount and to otherwise fund the other Transactions and to pay the related transaction fees and expenses. The commitments under the Commitment Letter are subject to customary closing conditions.

On June 4, 2021, Spinco entered into the Spinco Term Loan Credit Agreement, which reduced the Tranche 2 commitments under the Commitment Letter in the aggregate amount of $10.0 billion to zero. The Tranche 1 commitments under the Commitment Letter in the aggregate amount of $31.5 billion remain in effect as of the date hereof.

On or prior to the Distribution Date, Spinco expects to issue senior unsecured notes in a Rule 144A or other private placement in an aggregate principal amount of up to $31.5 billion (“Spinco Notes”) which will be used to pay the Special Cash Payment and issue to AT&T the Spinco Debt Securities, which will in turn be used by AT&T to repay certain existing debt pursuant to the Securities Exchange. The Spinco Debt Securities are expected to have a term of at least seven years and to be subject to customary covenants and other terms and conditions that are consistent in all material respects with market practice for comparable issuers.

Following the completion of the Transactions, it is expected that all obligations of Spinco with respect to the Spinco Notes (including the Spinco Debt Securities), the Bridge Loans (if applicable) and the Spinco Term Loan Credit Agreement will be guaranteed by WBD, DCL and Scripps. In addition, following the Merger, by virtue of the fact that Spinco will be a wholly owned subsidiary of WBD, the consolidated indebtedness of WBD and its subsidiaries will include the indebtedness of Spinco.

Upon the completion of the Transactions, the available commitments under the Revolving Credit Agreement (as defined herein) may, subject to certain conditions, be increased by $3.5 billion, to an aggregate amount not to exceed $6.0 billion.

For more information about the financing of the Transactions, see “Debt Financing.”

Other Agreements Related to the Transactions

Malone Voting Agreement

In connection with entering into the Merger Agreement, Discovery, AT&T and Spinco entered into the Malone Voting Agreement with Dr. Malone and certain affiliates of Dr. Malone, who collectively hold approximately % of the issued and outstanding shares of Discovery Series A common stock and approximately % of the issued and outstanding shares of Discovery Series B common stock, which is approximately % of the aggregate voting power of the shares of Discovery voting stock as of the Discovery record date. The Malone Voting Agreement, among other things, requires that Dr. Malone and his affiliates vote

their shares of Discovery Series A common stock and Discovery Series B common stock in favor of the Charter Amendment proposals and the Share Issuance proposal. The Malone Voting Agreement is attached to this proxy statement/prospectus as Annex C and is incorporated by reference herein.

A/N Voting Agreement

In connection with entering into the Merger Agreement, Discovery, AT&T and Spinco entered into the A/N Voting Agreement with Advance/Newhouse, which holds all of the issued and outstanding shares of Discovery Series A-1 preferred stock, which is approximately % of the aggregate voting power of the shares of Discovery voting stock as of the Discovery record date, and all of the issued and outstanding shares of Discovery Series C-1 preferred stock. The A/N Voting Agreement requires that Advance/Newhouse vote its shares of Discovery Series A-1 preferred stock and Discovery Series C-1 preferred stock in favor of the Charter Amendment proposals and the Share Issuance proposal. The A/N Voting Agreement is attached to this proxy statement/prospectus as Annex D and is incorporated by reference herein.

Consent Agreement

In connection with entering into the Merger Agreement, Discovery entered into the Consent Agreement with Advance/Newhouse. Pursuant to the terms of the Consent Agreement, Advance/Newhouse agreed to deliver an irrevocable written consent to Discovery consenting to, approving and adopting the Merger Agreement and any actions required thereby. The Consent was delivered in accordance with the affirmative vote or written consent required pursuant to the Certificate of Designation of Series A-1 Convertible Participating Preferred Stock of Discovery for any Special A-1 Class Vote Matter (as such term is defined therein). As part of the Consent Agreement, Discovery and Advance/Newhouse also agreed, among other things, that Discovery will designate Steven A. Miron and Steven O. Newhouse as directors of WBD following the Closing pursuant to the Merger Agreement in the class of directors whose terms will expire on WBD’s third annual meeting of stockholders following the effective time of the Merger and that Discovery and Advance/Newhouse will enter into a registration rights agreement on customary terms to be effective following the completion of the Merger. Advance/Newhouse delivered the Consent concurrently with the execution of the Consent Agreement and the Merger Agreement. The Consent Agreement is attached to this proxy statement/prospectus as Annex E and is incorporated by reference herein.

Employee Matters Agreement

In connection with the Transactions, Discovery, Spinco and AT&T have entered into an Employee Matters Agreement, dated as of May 17, 2021 (the “Employee Matters Agreement”), which establishes the obligations of Discovery, Spinco and AT&T with respect to the liabilities associated with current and former employees of the WarnerMedia Business and the covenants of the parties with respect to the employment and compensation of such individuals in the context of the Transactions. For a summary of the Employee Matters Agreement, see “Other Agreements Related to the Transactions—Employee Matters Agreement.”

Tax Matters Agreement

In connection with the Transactions, AT&T, Spinco and Discovery have entered into a Tax Matters Agreement (the “Tax Matters Agreement”) which governs the parties’ respective rights, responsibilities and obligations with respect to taxes, including taxes arising in the ordinary course of business, taxes, if any, incurred as a result of any failure of the Distribution, the Merger, or certain related Transactions to qualify as tax-free for U.S. federal income tax purposes, and the apportionment of tax attributes. The Tax Matters Agreement also sets forth the obligations of the parties with respect to the filing of tax returns, the administration of tax contests and assistance and cooperation on tax matters. For a summary of the Tax Matters Agreement, see “Other Agreements Related to the Transactions—Tax Matters Agreement.”

Transition Services Agreement

In connection with the completion of the Merger, AT&T and WBD will enter into a Transition Services Agreement (“TSA”) pursuant to which AT&T will, for a certain period of time, provide Spinco services reasonably necessary in order for the WarnerMedia Business to operate in substantially the same manner in which it operated in the 12-month period immediately prior to the completion of the Merger. To the extent any services reasonably necessary to conduct AT&T’s business are identified prior to the completion of the Merger, upon AT&T’s request, WBD will provide such services to AT&T pursuant to the TSA. The scope of services to be provided under the TSA, and the applicable term and fees for each such service, will be set forth in the TSA schedules, which will be negotiated in good faith and finalized prior to the completion of the Merger. The fees for the TSA services will be no greater than at fully-loaded cost without a profit margin (including employee costs related thereto) and including any additional reasonable, documented out-of-pocket costs or expenses incurred by the service provider and directly related to the provision of such service.

Intellectual Property Matters Agreement

Pursuant to the Separation Agreement, AT&T and Spinco and certain of their affiliates will enter into an Intellectual Property Matters Agreement (“IPMA”), effective as of the Distribution Date, pursuant to which AT&T and Spinco and certain of their affiliates will grant each other non-exclusive, royalty-free, irrevocable and perpetual cross-licenses to use (1) technology owned by or, to the extent sublicensable, licensed to either AT&T or Spinco, and used in the other party’s business in the 12-month period prior to the Distribution Date, in substantially the same manner as such technology was used prior to the Distribution Date and (2) certain scheduled patents for which the named inventors include at least one Spinco Group employee and one AT&T Group employee, and the relevant invention was conceived or reduced to practice during such employees’ period of employment, for any and all purposes. The technology licensed under the IPMA will be specifically identified on a schedule to the extent reasonably practicable. AT&T and Spinco and certain of their affiliates will also grant each other non-exclusive licenses to use certain trademarks owned by either party and used or displayed in the other party’s business as of the Distribution Date for a transitional period of up to 60 days (or such longer period of up to 120 days as may be negotiated by the parties) and in the same manner as used immediately prior to the Distribution Date. In addition, AT&T and Spinco agree to undertake good-faith rebranding efforts for their respective businesses during such transitional period.

Data Rights Agreement

Prior to the effective date of the Separation (the “Separation Date”), AT&T and Spinco will enter into a Data Rights Agreement (the “Data Rights Agreement”) governing each party’s rights to access and process any data that was processed in the operation of both of AT&T’s business and the WarnerMedia Business between June 14, 2018 and the Separation Date in a manner intended to provide continuity following the Separation Date with respect to permitted access to and use of such data. The terms of the Data Rights Agreement will also allocate, as between AT&T and Spinco, ownership and control of data processed in the operation of AT&T’s business or the WarnerMedia Business, on the basis that any such data first collected or processed by Spinco and primarily related to the WarnerMedia Business will be owned by Spinco, and any such data first collected or processed by AT&T and primarily related to AT&T’s business will be owned by AT&T.

Information about the Discovery Special Meeting

Date, Time and Place

The Discovery special meeting is scheduled to be held online via live audio webcast at on at Eastern Time. For the health and well-being of Discovery stockholders, employees and directors, the Discovery special meeting will be held in a virtual meeting format only, with no physical in-person meeting.

Purpose of the Discovery Special Meeting

Discovery Record Date; Stockholders Entitled to Vote

The Discovery Board has fixed the close of business on as the record date for the Discovery special meeting. Only holders of record of shares of Discovery voting stock or Discovery Series C-1 preferred stock as of the Discovery record date will be entitled to notice of, and to vote at, the Discovery special meeting or any adjournment or postponement thereof. A list of Discovery holders of record entitled to vote at the Discovery special meeting will be available at the executive offices of Discovery at 230 Park Avenue South, New York, New York 10003 at least ten days prior to the Discovery special meeting and will also be available online at for inspection during the entirety of the Discovery special meeting.

As of the Discovery record date, there were a total of , , and issued and outstanding shares of Discovery Series A common stock, Discovery Series B common stock, Discovery Series A-1 preferred stock and Discovery Series C-1 preferred stock, respectively. As of the Discovery record date, approximately %, %, % and % of the issued and outstanding shares of Discovery Series A common stock, Discovery Series B common stock, Discovery Series A-1 preferred stock and Discovery Series C-1 preferred stock, respectively, were held by Discovery’s directors and executive officers and their affiliates. Discovery currently expects that Discovery’s directors and executive officers and their affiliates will vote their shares of Discovery voting stock in favor of the Charter Amendment proposals and the Share Issuance proposal, although only Dr. Malone has entered into an agreement obligating him to do so. Additionally, Discovery currently expects that Discovery’s directors and executive officers and their affiliates will vote their shares of Discovery voting stock in favor of the “Golden Parachute” Compensation proposal.

Pursuant to the voting agreements, (1) Dr. Malone and certain of his affiliates, who collectively hold approximately % and % of the issued and outstanding shares of Discovery Series A common stock and Discovery Series B common stock, respectively, which is approximately % of the aggregate voting power of the shares of Discovery voting stock as of the Discovery record date and (2) Advance/Newhouse, which holds all of the issued and outstanding shares of Discovery Series A-1 preferred stock, which is approximately % of the aggregate voting power of the shares of Discovery voting stock as of the Discovery record date, and all of the issued and outstanding shares of Discovery Series C-1 preferred stock, have agreed to vote their shares in favor of the Charter Amendment proposals and the Share Issuance Proposal. For additional information regarding the voting agreements, see “Other Agreements Related to the Transactions—Malone Voting Agreement” and “Other Agreements Related to the Transactions—A/N Voting Agreement.”

Pursuant to the Consent Agreement, Advance/Newhouse has delivered an irrevocable written consent to Discovery consenting to, approving and adopting the Merger Agreement and any actions required thereby, including the Charter Amendment and the Share Issuance. The Consent was delivered in accordance with the affirmative vote or written consent required pursuant to the Certificate of Designation of Series A-1 Convertible Participating Preferred Stock of Discovery for any Special A-1 Class Vote Matter (as such term is defined therein). As of the Discovery record date, Advance/Newhouse holds all of the issued and outstanding shares of Discovery Series A-1 preferred stock. For additional information regarding the Consent Agreement, see “Other Agreements Related to the Transactions—Consent Agreement.”

Quorum

voting power of (1) the outstanding shares of Discovery Series B common stock, voting as a class, (2) the outstanding shares of Discovery Series A-1 preferred stock, voting as a class, (3) the outstanding shares of Discovery Series C-1 preferred stock, voting as a class, and (4) the outstanding shares of Discovery voting stock, voting together as a single class, will constitute a quorum. Discovery stockholders present virtually during the Discovery special meeting will be considered present in person at the Discovery special meeting. If a quorum is not present, the Discovery special meeting will be adjourned until a quorum is obtained.

Required Vote

Approval of each of the Charter Amendment proposals requires the affirmative vote of (1) at least 75% of the outstanding shares of Discovery Series B common stock, voting as a class, (2) at least a majority of the outstanding shares of Discovery Series A-1 preferred stock, voting as a class, (3) at least a majority of the outstanding shares of Discovery Series C-1 preferred stock, voting as a class, and (4) at least a majority of the combined voting power of the outstanding shares of Discovery voting stock, voting together as a single class, present in person or represented by proxy at the Discovery special meeting and entitled to vote on such proposal.

Failure to Vote and Abstentions

An abstention occurs when a holder of shares of Discovery capital stock entitled to vote at the Discovery special meeting attends the Discovery special meeting in person and does not vote or returns a proxy with an “abstain” vote. If you submit a proxy card on which you indicate that you abstain from voting, your abstention will count as a vote “AGAINST” the applicable proposal.

Discovery Series C-1 preferred stock, and, assuming a quorum is present at the Discovery special meeting, will have no effect on the Charter Amendment proposals, the Share Issuance proposal or the “Golden Parachute” Compensation proposal when the Discovery voting stock votes together as a single class.

Your vote is very important, regardless of the number of shares you own. Whether or not you expect to attend the Discovery special meeting, please vote or otherwise submit a proxy to vote your shares as promptly as possible so that your shares may be represented and voted at the Discovery special meeting. If your shares are held in the name of a bank, brokerage firm, nominee or other record holder, please follow the instructions on the voting instruction form furnished to you by such record holder.

For more information about the Discovery special meeting, see “Information about the Discovery Special Meeting.”

Recommendation of the Discovery Board; Discovery’s Reasons for the Transactions

THE DISCOVERY BOARD RECOMMENDS THAT YOU VOTE “FOR” THE CHARTER AMENDMENT PROPOSALS, “FOR” THE SHARE ISSUANCE PROPOSAL AND “FOR” THE “GOLDEN PARACHUTE” COMPENSATION PROPOSAL.

The Discovery Board carefully evaluated the Transactions in consultation with Discovery management and Discovery’s advisors, and, on May 16, 2021, the Discovery Board approved the Transaction Documents and the Transactions contemplated thereby, including the Merger, the Charter Amendment and the Share Issuance, and determined that the Transaction Documents and the Transactions are advisable, fair to and in the best interests of Discovery and its stockholders. All members of the Discovery Board were in attendance at the meeting, and the Discovery Board unanimously recommended that Discovery stockholders vote “FOR” the Charter Amendment proposals and “FOR” the Share Issuance proposal.

In addition, the Discovery Board unanimously recommended that Discovery stockholders vote “FOR” the “Golden Parachute” Compensation proposal.

In making its determination to approve the Transaction Documents and the Transactions and resolve to recommend that Discovery stockholders approve the Charter Amendment proposals and the Share Issuance proposal, the Discovery Board held a number of meetings and considered various factors. The Discovery Board considered these factors as a whole and considered the relevant information and factors to be favorable to, and in support of, its determination. In the course of its deliberations, the Discovery Board also considered a variety of risks and other potentially negative factors. For the factors considered by the Discovery Board in reaching its decision, see “The Transactions—Recommendation of the Discovery Board; Discovery’s Reasons for the Transactions.”

Opinions of Discovery’s Financial Advisors

Opinion of Allen & Company LLC

Discovery has engaged Allen & Company LLC, referred to as Allen & Company, as a financial advisor to Discovery in connection with the proposed Merger. In connection with this engagement, Allen & Company delivered a written opinion, dated May 16, 2021, to the Discovery Board as to the fairness, from a financial point of view and as of the date of such opinion, to Discovery of the Merger Consideration provided for pursuant to the Merger Agreement. The full text of Allen & Company’s written opinion, dated May 16, 2021, which describes the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken, is attached to this proxy statement/prospectus as Annex G and is incorporated by reference herein in

its entirety. The description of Allen & Company’s opinion set forth in this proxy statement/prospectus is qualified in its entirety by reference to the full text of Allen & Company’s opinion. Allen & Company’s opinion and advisory services were intended for the benefit and use of the Discovery Board (in its capacity as such) in connection with its evaluation of the Merger Consideration from a financial point of view to Discovery and did not address any related transactions or any other terms, aspects or implications of the Merger. For purposes of Allen & Company’s opinion, the term “related transactions” refers to the transactions contemplated by the Merger Agreement and related documents other than the Merger, and references to “WarnerMedia” mean the business and operations of WarnerMedia after giving effect to the related transactions. Allen & Company expressed no opinion or view as to the fairness of the Merger Consideration to the holders of any class or series of securities, creditors or other constituencies of Discovery. Allen & Company’s opinion did not constitute a recommendation as to the course of action that Discovery (or the Discovery Board or any committee thereof) should pursue in connection with the Merger or the related transactions or otherwise address the merits of the underlying decision by Discovery to engage in the Merger or the related transactions, including in comparison to other strategies or transactions that might be available to Discovery or which Discovery might engage in or consider. Allen & Company’s opinion does not constitute advice or a recommendation to any security holder as to how such security holder should vote or act on any matter relating to the Merger, the related transactions or otherwise. For a summary of Allen & Company’s opinion and the financial analyses underlying such opinion, see “The Transactions—Opinions of Discovery’s Financial Advisors—Opinion of Allen & Company LLC.”

Opinion of J.P. Morgan Securities LLC

Pursuant to an engagement letter, Discovery retained J.P. Morgan Securities LLC, referred to as J.P. Morgan, as a financial advisor to Discovery in connection with the proposed Merger. At a meeting of the Discovery Board on May 16, 2021, J.P. Morgan rendered an oral opinion, confirmed by delivery of a written opinion dated May 16, 2021, to the Discovery Board as to the fairness, from a financial point of view and as of the date of such opinion, to Discovery of the Merger Consideration to be paid by Discovery in the proposed Merger. The full text of the written opinion of J.P. Morgan, dated May 16, 2021, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing such opinion, is attached as Annex H to this proxy statement/prospectus and is incorporated herein by reference. The summary of the opinion of J.P. Morgan set forth in this proxy statement/prospectus is qualified in its entirety by reference to the full text of such opinion. J.P. Morgan’s written opinion was addressed to the Discovery Board (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed Merger, was directed only to the Merger Consideration payable in the Merger and did not address any other aspect of the Merger. For purposes of J.P. Morgan’s opinion, the term “related transactions” refers to the transactions contemplated by the Merger Agreement and related documents other than the Merger, and references to “WarnerMedia” mean the business and operations of WarnerMedia after giving effect to the related transactions. J.P. Morgan expressed no opinion as to the fairness of the Merger Consideration to the holders of any class of securities, creditors or other constituencies of Discovery or as to the underlying decision by Discovery to engage in the Merger or the related transactions. The issuance of J.P. Morgan’s opinion was approved by a fairness committee of J.P. Morgan. J.P. Morgan’s opinion does not constitute a recommendation to any stockholder of Discovery as to how such stockholder should vote with respect to the Merger or any other matter. For a summary of J.P. Morgan’s opinion and the financial analyses underlying such opinion, see “The Transactions— Opinions of Discovery’s Financial Advisors—Opinion of J.P. Morgan Securities LLC.”

AT&T’s Reasons for the Transactions

The AT&T Board and its senior management evaluated the Transactions in consultation with AT&T’s advisors, and the AT&T Board approved the Transaction Documents and the Transactions contemplated thereby

on May 16, 2021. In making its determination to approve the Transaction Documents and the Transactions, AT&T considered a number of factors, including, but not limited to, the Transactions were in the best interests of AT&T stockholders, the tax-efficient nature of the Transactions and the improvement to AT&T’s capital structure as a result of the Transactions. AT&T considered these factors as a whole and considered the relevant information and factors to be favorable to, and in support of, its determination, as well as a variety of risks and other potentially negative factors. For the factors considered by AT&T in reaching its decision, see “The Transactions—AT&T’s Reasons for the Transactions.”

Regulatory Approvals

Each of Discovery and AT&T has agreed to use reasonable best efforts to take or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper, or advisable to complete and make effective the Transactions contemplated by the Merger Agreement. For a summary of such actions, see “The Merger Agreement—Regulatory Matters.”

United States Antitrust

Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), Discovery and AT&T are required to file notifications with the U.S. Federal Trade Commission (the “FTC”) and the Antitrust Division of the U.S. Department of Justice (the “Antitrust Division”) and to observe a mandatory premerger waiting period before completing the Merger. A transaction requiring notification under the HSR Act may not be completed until the expiration of a 30-calendar-day waiting period following the parties’ filing of their respective HSR Act notifications or the early termination of that waiting period. If the Antitrust Division or the FTC issues a Request for Additional Information and Documentary Material (a “Second Request”) prior to the expiration of the initial waiting period, the parties must observe a second 30-calendar-day waiting period, which would begin to run only after both parties have substantially complied with the Second Request, unless the waiting period is terminated earlier. Notwithstanding any expiration of the waiting period after substantial compliance with a Second Request, the parties could agree with the Antitrust Division or the FTC to not complete the transaction prior to a certain date or event. On June 15, 2021, Discovery and AT&T filed notifications with the FTC and the Antitrust Division. On July 6, 2021, Discovery voluntarily withdrew its premerger notification, effective July 15, 2021. Discovery refiled its notification on July 19, 2021. On August 18, 2021, each of Discovery and AT&T received a Second Request from the Antitrust Division in connection with the Merger and each of Discovery and AT&T have certified substantial compliance with that Second Request. Although Discovery and AT&T believe that the Transactions do not raise substantial regulatory concerns and that all remaining regulatory approvals will be obtained on a timely basis, Discovery and AT&T cannot be certain when, if or under what conditions these approvals will be obtained.

Other Regulatory Approvals

The Merger Agreement provides that the Merger is also subject to competition approvals by the European Commission (“EC”) pursuant to the EC Merger Regulation as well as by the competition law regulators in a number of other jurisdictions. The Merger cannot be completed until after the applicable waiting periods have expired or the relevant approvals have been obtained under the antitrust and competition laws of these jurisdictions. Further, completion of the Merger is also conditioned upon the receipt of all necessary consents from the competent foreign direct investment, media and other regulators. Discovery and AT&T are in the process of obtaining these necessary regulatory clearances.

Material U.S. Federal Income Tax Consequences

The completion of the Distribution, the Merger and certain related Transactions are conditioned upon AT&T’s receipt, with a copy to Discovery, of (1) the Tax Opinions to the effect that, among other things, for

U.S. federal income tax purposes, (a) the Distribution, taken together with certain related Transactions, will qualify as a “reorganization” under Section 368(a)(1)(D) of the Code and a tax-free distribution under Section 355 of the Code and that certain other related Transactions will qualify for their intended tax-free treatment and (b) the Merger will qualify as a “reorganization” under Section 368(a) of the Code and (2) the IRS Ruling regarding the qualification of the Distribution and certain related Transactions for tax-free treatment. Provided that such transactions so qualify, AT&T stockholders generally will not recognize any income, gain or loss for U.S. federal income tax purposes upon the receipt of Spinco common stock in the Distribution or WBD common stock in the Merger (except for any gain or loss attributable to the receipt of cash in lieu of fractional shares of WBD common stock).

Discovery will not recognize any gain or loss for U.S. federal income tax purposes upon the completion of the Merger. Because Discovery stockholders in their capacity as such will not receive consideration in the Distribution or the Merger, Discovery stockholders will generally not recognize gain or loss for U.S. federal income tax purposes upon either the Distribution (including the Exchange Offer) or the Merger. Neither Discovery nor Discovery stockholders are expected to recognize gain or loss for U.S. federal income tax purposes upon the Reclassification.

Please see “Risk Factors—Risk Factors Relating to the Transactions— The Distribution could result in significant tax liability, and Discovery may be obligated to indemnify AT&T for any such tax liability imposed on AT&T,” “Risk Factors—Risk Factors Relating to the Transactions—If the Merger does not qualify as a tax-free reorganization under Section 368 of the Code, participating AT&T stockholders may have significant tax liability” and “Material U.S. Federal Income Tax Consequences” for more information regarding the Tax Opinions and the IRS Ruling and the potential tax consequences of the Transactions. AT&T stockholders and Discovery stockholders should consult their own tax advisors for a full understanding of the tax consequences to them of the Transactions in light of their particular circumstances.

Board of Directors and Management of WBD Following the Transactions

As of the effective time of the Merger, the WBD Board will consist of 13 directors, consisting of six Discovery Designees, including the Chief Executive Officer of WBD as of immediately after the effective time of the Merger, and seven AT&T Designees. In addition, the WBD Board will, upon the completion of the Merger, be classified into three classes: the Class I directors will initially include two Discovery Designees and two AT&T Designees, the Class II directors will initially include two Discovery Designees and two AT&T Designees and the Class III directors will initially include two Discovery Designees and three AT&T Designees, one of whom will be the Chairperson of the WBD Board. The initial term of the Class I directors will expire immediately following WBD’s first annual meeting of stockholders after the completion of the Merger, the initial term of the Class II directors will expire immediately following WBD’s second annual meeting of stockholders after the completion of the Merger and the initial term of the Class III directors will expire immediately following WBD’s third annual meeting of stockholders after the completion of the Merger. Upon the expiration of the initial term of each class of directors, such class of WBD directors will be elected for a one-year term expiring immediately following each WBD annual meeting of stockholders.

The Discovery Designees will include David M. Zaslav, who will serve as President and Chief Executive Officer of WBD. It is expected that John C. Malone will also serve as a Discovery Designee. Pursuant to the terms of the Consent Agreement, the initial Discovery Designees for the Class III directors will be Steven A. Miron and Steven O. Newhouse. The other Discovery Designees and the AT&T Designees will be named prior to the Closing. For more information about the directors expected to be appointed to the WBD Board, see “The Transactions—Board of Directors and Management of WBD Following the Transactions.”

The Merger Agreement provides that, as of the effective time of the Merger, David M. Zaslav will serve as President and Chief Executive Officer of WBD. Mr. Zaslav will be responsible for the strategic direction of WBD, including its overall operations and performance. The Merger Agreement provides that, prior to the completion of the Transactions, Discovery and AT&T are to cooperate and consult in good faith to appoint such other senior executive officers as are mutually agreed, and to determine such senior executive officers’ initial roles, titles and responsibilities, as of the effective time of the Merger. Gunnar Wiedenfels will serve as Chief Financial Officer of WBD. Prior to and after the completion of the Transactions, the Chief Executive Officer will have principal responsibility in the appointment of the senior executive team and their roles, titles and responsibilities. The Chief Executive Officer will also have principal responsibility in the approval of appointments for management positions for corporate functions of WBD.

Interests of Discovery’s Directors and Executive Officers in the Transactions

Certain of Discovery’s directors and executive officers and Discovery Designees may be deemed to have interests in the Transactions that may be different from, or in addition to, those of Discovery stockholders generally. The Discovery Board was aware of and considered these potential interests, among other matters, in evaluating, negotiating and reaching the determination to approve the Transaction Documents and the Transactions and to recommend to Discovery stockholders that they vote to approve the Charter Amendment proposals, the Share Issuance proposal and the “Golden Parachute” Compensation proposal. These interests may include the following, among others:

•

Dr. Malone, who is a director of Discovery, is a party to the Malone Voting Agreement. The Malone Voting Agreement, among other things, requires that Dr. Malone and certain of his affiliates vote their shares of Discovery Series A common stock and Discovery Series B common stock in favor of the Charter Amendment proposals and the Share Issuance proposal;

•

Robert J. Miron, who is a director of Discovery, was previously the Chief Executive Officer and Chairman of the board of directors of ANPP, Steven A. Miron, who is a director of Discovery, is the current Chief Executive Officer of ANP and a senior executive officer at Advance, and Steven O. Newhouse, who is a Discovery Designee, is the current Co-President of Advance Publications, Inc. (“Advance”). As of the Discovery record date, Advance/Newhouse holds all of the issued and outstanding shares of Discovery Series A-1 preferred stock and Discovery Series C-1 preferred stock. Pursuant to the A/N Voting Agreement, Advance/Newhouse is required to vote its shares of Discovery Series A-1 preferred stock and Discovery Series C-1 preferred stock in favor of the Charter Amendment proposals and the Share Issuance proposal. Pursuant to the Consent Agreement, Advance/Newhouse agreed to deliver an irrevocable written consent to Discovery consenting to, approving and adopting the Merger Agreement and any actions required thereby. As part of the Consent Agreement, Discovery and Advance/Newhouse also agreed, among other things, that Discovery will designate Steven A. Miron and Steven O. Newhouse as directors of WBD following the completion of the Transactions. Mr. R. Miron, Mr. S. Miron and Mr. Newhouse are not party to the A/N Voting Agreement or the Consent Agreement. In connection with Advance/Newhouse’s entry into the Consent Agreement and related forfeiture of the significant rights attached to the Discovery Series A-1 preferred stock in the Reclassification, Advance/Newhouse will receive an increase to the number of shares of WBD common stock into which the Discovery Series A-1 preferred stock would be converted;

•

Paul A. Gould, who is a director of Discovery, is a managing director at Allen & Company, which has served as a financial advisor to Discovery in connection with the Transactions. For Allen & Company’s financial advisory services in connection with the Transactions, Discovery has agreed to pay Allen & Company an aggregate cash fee of $75 million, no portion of which will be received by Mr. Gould; and

•

Seventy percent of the Discovery equity-based awards granted to David M. Zaslav under his Prior Employment Agreement (as defined herein) will “single-trigger” vest upon the Closing and certain

unvested balances in Discovery’s Deferred Compensation Plan (as defined herein) held by each of Lori C. Locke and Adria Alpert Romm will automatically accelerate and fully vest upon the Closing (assuming Closing occurred on November 1, 2021). The severance benefits that may be payable to Discovery’s executive officers upon a termination without cause or for good reason will not be enhanced based on the completion of the Transactions.

These interests are described in further detail under “The Transactions—Interests of Discovery’s Directors and Executive Officers in the Transactions.” Also, as more fully described in “The Merger Agreement—Post-Closing Board of Directors and Officers,” certain existing directors and executive officers of Discovery will or may serve as directors of WBD upon completion of the Transactions.

Effects of the Reclassification on Outstanding Discovery Equity-Based Awards

The Merger Agreement provides that in connection with the Charter Amendment, all Discovery stock options, restricted stock units, performance restricted stock units and stock appreciation rights (“Discovery Options,” “Discovery RSUs,” “Discovery PRSUs” and “Discovery SARs,” respectively), in each case, issued under the Discovery equity plans and outstanding immediately prior to the Charter Amendment will be converted into equity-based awards on comparable terms and conditions with respect to shares of WBD common stock. The conversion of each such Discovery Option, Discovery RSU, Discovery PRSU and Discovery SAR will take place at the effective time of the Charter Amendment, as more fully described in “The Transactions—Effects of the Reclassification on Outstanding Discovery Equity-Based Awards.”

Interests of AT&T’s Directors and Executive Officers in the Transactions

The directors and executive officers of AT&T are not entitled to receive any extra or special benefit that is not shared on a pro rata basis by all other AT&T stockholders in connection with the Transactions, except for the case of Jason Kilar’s existing employment agreement as described under “The Transactions—Interests of AT&T’s Directors and Executive Officers in the Transactions.”

Effects of the Distribution and the Merger on Outstanding AT&T Equity-Based Awards

Upon or following the Closing, with respect to AT&T equity-based awards held by Spinco Employees, (1) each AT&T RSU Award that was granted prior to May 17, 2021 and is outstanding and unvested as of the Closing and each AT&T RSU Award that was granted after May 17, 2021 and is outstanding as of the Closing will be replaced with a WBD RSU Award based on the Discovery equity adjustment ratio with terms and conditions otherwise generally the same as those to which the underlying AT&T RSU Award was subject immediately before the Merger, and (2) each AT&T RSU Award that was granted prior to May 17, 2021 and is outstanding and vested as of the Closing and each AT&T Option Award that was granted prior to May 17, 2021 and is outstanding as of the Closing will remain an award denominated in AT&T common stock with the same terms and conditions, provided that such award may be equitably adjusted to the extent needed to prevent the dilution or enlargement of rights thereunder as determined by the AT&T Compensation Committee to reflect the Distribution.

Certain current and former employees of AT&T who are not currently or will not become Spinco Employees also hold AT&T equity-based awards. Upon or following the Closing, each AT&T RSU Award, AT&T Restricted Stock Award, AT&T PSU Award and AT&T Option Award, in each case that is outstanding as of the Closing and held by an AT&T employee, will remain an award denominated in AT&T common stock with the same terms and conditions, provided that such award may be equitably adjusted to the extent needed to prevent the dilution or enlargement of rights thereunder as determined by the AT&T Compensation Committee to reflect the Distribution.

The treatment of AT&T equity-based awards is described in further detail in “The Transactions—Effects of the Distribution and the Merger on Outstanding AT&T Equity-Based Awards.”

Dissenters’ Rights/Rights of Appraisal

Under the Delaware General Corporation Law (the “DGCL”), a stockholder who does not vote in favor of certain mergers or consolidations and who is entitled to demand and has properly demanded appraisal of his or her shares in accordance with, and who complies in all respects with the requirements of Section 262 of the DGCL will be entitled to an appraisal by the Court of Chancery of the State of Delaware of the fair value of his or her shares. However, stockholders do not have appraisal rights if the shares of stock they hold, at the record date for determination of stockholders entitled to receive notice of the meeting of stockholders to act upon the merger or consolidation, are either (1) listed on a national securities exchange or (2) held of record by more than 2,000 holders. Further, no appraisal rights are available to stockholders of the surviving corporation if the merger did not require the vote of the stockholders of the surviving corporation. Notwithstanding the foregoing, appraisal rights are available if stockholders are required by the terms of the merger agreement to accept for their shares anything other than (a) shares of stock of the surviving corporation, (b) shares of stock of another corporation that will either be listed on a national securities exchange or held of record by more than 2,000 holders, (c) cash instead of fractional shares or (d) any combination of clauses (a)–(c). Appraisal rights are also available under the DGCL in certain other circumstances, including in certain parent-subsidiary corporation mergers and in certain circumstances where the certificate of incorporation so provides.

Under the DGCL, Discovery stockholders are not entitled to appraisal rights in connection with the Transactions. The Discovery charter does not provide appraisal rights in any additional circumstance. As a result, no appraisal rights are available to holders of Discovery capital stock in connection with the Transactions.

In addition, no appraisal rights are available to holders of AT&T common stock in connection with the Exchange Offer or any pro rata distribution of shares of Spinco common stock.

Summary Risk Factors

There are a number of risks that you should understand before deciding how to vote for the proposals presented in this proxy statement/prospectus or making an investment decision regarding the Transactions. These risks are discussed more fully in “Risk Factors.” Any of these risks could materially adversely affect the business, financial condition and results of operations of Discovery, the WarnerMedia Business or WBD and the actual outcome of matters as to which forward-looking statements are made in this proxy statement/prospectus. These risks include, but are not limited to, the following:

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The Transactions may not be completed on the terms or timeline currently contemplated, or at all, as Discovery and AT&T may be unable to satisfy the conditions or obtain the approvals required to complete the Transactions or such approvals may contain material restrictions or conditions.

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If completed, the Transactions may not be successful or achieve their anticipated financial and other benefits, including the synergies Discovery expects to achieve, due to integration or other challenges.

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Failure to complete the Transactions in a timely manner or at all could adversely affect Discovery’s stock price as well as its future business and its financial condition and results of operations.

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Discovery stockholders will, in the aggregate, have a significantly reduced ownership and voting interest in WBD after the completion of the Transactions and will exercise less influence over management.

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The Merger Agreement contains provisions that may discourage other companies from trying to acquire Discovery and limit Discovery’s ability to take certain corporate actions, and the pendency of the Transactions could have an adverse effect on Discovery’s stock price.

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The calculation of the Merger Consideration will not be adjusted if there is a change in the value of the WarnerMedia Business or its assets or the value of Discovery before the Transactions are completed.

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Discovery’s estimates and judgments related to the acquisition accounting models used to record the purchase price allocation could be inaccurate, and WBD could be required to recognize impairment charges related to goodwill and other intangible assets.

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If the Merger does not qualify as a tax-free reorganization under Section 368 of the Code, the Distribution could result in significant tax liability, and Discovery may be obligated to indemnify AT&T for any such tax liability imposed on AT&T.

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Discovery and the WarnerMedia Business may have difficulty attracting, motivating and retaining executives and other employees in light of the Transactions.

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The historical financial information of the WarnerMedia Business may not be representative of its financial condition or results of operations if it had been operated independently of AT&T and, as a result, may not be a reliable indicator of its future results.

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The unaudited pro forma condensed combined financial statements of Discovery and the WarnerMedia Business are not intended to reflect what the actual financial condition and results of operations would have been had Discovery and the WarnerMedia Business been a combined company for the periods presented, and therefore such pro forma financial information may not be indicative of WBD’s future operating performance.

•

WBD may be unable to provide (or obtain from third parties) the same types and level of services to the WarnerMedia Business that historically have been provided by AT&T or may be unable to provide (or obtain) them at the same cost.

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Following the completion of the Transactions, WBD’s consolidated indebtedness will increase substantially from that of Discovery’s prior to the Transactions. This increased level of indebtedness could adversely affect WBD, including by decreasing its business flexibility.

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The financial projections included in this proxy statement/prospectus are based upon estimates and assumptions made at the time they were prepared. If these estimates or assumptions prove to be incorrect or inaccurate, WBD’s actual operating results may differ materially from those forecasted for Discovery and the WarnerMedia Business and WBD may not achieve the increases in revenues and net earnings that Discovery expects as a result of the Transactions.

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Discovery and the WarnerMedia Business operate in highly competitive industries, and if Discovery and the WarnerMedia Business are unable to compete effectively, WBD’s business, financial condition and results of operations could suffer.

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The success of WBD’s business will depend on the acceptance of WBD’s entertainment, sports and news content by its U.S. and foreign viewers, which may be unpredictable and volatile.

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There has been a shift in consumer behavior as a result of technological innovations and changes in the distribution of content, which may affect WBD’s viewership and the profitability of its business in unpredictable ways.

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If WBD’s DTC products fail to attract and retain subscribers, WBD’s business, financial condition and results of operations may be adversely impacted.

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WBD’s success will depend on attracting, developing, motivating and retaining talented people within its business. Significant shortfalls in recruitment or retention, or failure to adequately motivate employees, could adversely affect WBD’s ability to compete and achieve its strategic goals.

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The COVID-19 pandemic has caused substantial disruption in theatrical and television production, financial markets and economies worldwide, which could result in adverse effects on the market price of WBD common stock and WBD’s business, operations and ability to raise capital.

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Changes in domestic and foreign laws and regulations and other risks related to international operations could adversely impact WBD’s business, financial condition and results of operations.

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Theft of Discovery’s or the WarnerMedia Business’s content and unauthorized duplication, distribution and exhibition of such content may decrease revenue received from WBD’s programming and adversely affect its business, financial condition and results of operations.

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WBD’s participation in multiemployer defined benefit pension plans could subject WBD to liabilities that could adversely affect WBD’s business, financial condition and results of operations.

•

WBD’s businesses may be subject to labor disruption.

Accounting Treatment

Accounting Standards Codification (“ASC”) 805, Business Combinations, requires the use of the acquisition method of accounting for business combinations. In applying the acquisition method, it is necessary to identify the accounting acquirer. In a business combination effected through an exchange of equity interests, such as the Merger, the entity that issues the interests is generally the accounting acquirer. In identifying Discovery as the accounting acquirer, Discovery’s conclusion is based primarily upon the following facts: (1) Discovery initiated the Transactions, will be the legal acquirer of Spinco and will transfer equity consideration to Spinco stockholders, (2) AT&T will receive up to approximately $43.0 billion of consideration as part of its disposition of the WarnerMedia Business, (3) the current Chief Executive Officer of Discovery will serve as Chief Executive Officer of WBD for a substantial period of time after the Transactions and will be primarily responsible for appointing the rest of the executive management team of WBD, and the current Chief Financial Officer of Discovery will serve as Chief Financial Officer of WBD, (4) no stockholder or group of stockholders will hold a controlling interest in WBD after the completion of the Transactions and a Discovery stockholder is expected to have the largest minority interest in WBD and (5) AT&T will have no input on the strategic direction and management of WBD after the completion of the Transactions. See “The Transactions—Accounting Treatment.”

As a result of the identification of Discovery as the accounting acquirer, Discovery will apply the acquisition method of accounting to the assets acquired and liabilities assumed of the WarnerMedia Business upon completion of the Merger. Upon completion of the Transactions, the historical financial statements will reflect only the operations and financial condition of Discovery.

SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION

The following summary historical consolidated financial information of Discovery, summary historical consolidated financial information of AT&T, summary historical combined financial information of the WarnerMedia Business, summary unaudited pro forma condensed combined financial information of Discovery and the WarnerMedia Business and summary historical market price are being provided to help you in your analysis of the financial aspects of the Transactions. The summary unaudited pro forma condensed combined financial information of Discovery and the WarnerMedia Business have been prepared by Discovery for illustrative purposes only and are not necessarily indicative of what the operating results or financial position of Discovery or the WarnerMedia Business would have been had the Transactions been completed at the beginning of the periods or on the dates indicated, nor are they necessarily indicative of the results of operations or financial condition that may be expected for any future period or date. You should read this information in conjunction with the financial information included elsewhere and incorporated by reference into this proxy statement/prospectus. See “Where You Can Find More Information; Incorporation by Reference,” “Unaudited Pro Forma Condensed Combined Financial Statements of Discovery and the WarnerMedia Business,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of the WarnerMedia Business,” “Historical Market Price” and “Parties to the Transactions.”

Summary Historical Consolidated Financial Information of Discovery

The following summary historical consolidated financial information of Discovery as of December 31, 2020 and 2019 and for the years ended December 31, 2020, 2019 and 2018 has been derived from Discovery’s historical audited consolidated financial statements and the notes thereto which are incorporated by reference into this proxy statement/prospectus. The summary historical consolidated balance sheet information of Discovery as of December 31, 2018 has been derived from Discovery’s historical audited consolidated financial statements and the notes thereto which are not incorporated by reference into this proxy statement/prospectus. The following summary historical consolidated financial information of Discovery as of September 30, 2021 and for the nine months ended September 30, 2021 and 2020 has been derived from Discovery’s unaudited condensed consolidated financial statements and the notes thereto which are incorporated by reference into this proxy statement/prospectus. The summary historical consolidated balance sheet information of Discovery as of September 30, 2020 has been derived from Discovery’s unaudited condensed consolidated financial statements and the notes thereto which are not incorporated by reference into this proxy statement/prospectus. The summary historical consolidated financial information is qualified in its entirety by, and should be read in conjunction with, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Discovery’s consolidated financial statements and unaudited condensed consolidated financial statements and the notes thereto included in Discovery’s Annual Report on Form 10-K for the year ended December 31, 2020 and Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021, each of which is incorporated by reference into this proxy statement/prospectus. See “Where You Can Find More Information; Incorporation by Reference.” Discovery’s historical consolidated financial information may not be indicative of the future performance of WBD following the Transactions. See “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors.”


	Nine Months Ended September 30,				Fiscal Years Ended December 31,
(dollars in millions, except per share amounts)	2021		2020		2020		2019		2018
Selected Statement of Operations Information:
Revenues	$	9,004	$	7,785	$	10,671	$	11,144	$	10,553
Operating income		1,504		2,027		2,515		3,009		1,934
Net income		1,106		1,037		1,355		2,213		681
Net income available to Discovery, Inc.		968		948		1,219		2,069		594


	Nine Months Ended September 30,				Fiscal Years Ended December 31,
(dollars in millions, except per share amounts)	2021		2020		2020		2019		2018
Net income per share allocated to Discovery, Inc. Series A, B and C common stockholders:
Basic	$	1.47	$	1.40	$	1.82	$	2.90	$	0.86
Diluted		1.46		1.40		1.81		2.88		0.86
Weighted average shares outstanding:
Basic		503		510		505		529		498
Diluted		665		677		672		711		688
Selected Balance Sheet Information:
Cash and cash equivalents	$	3,116	$	1,893	$	2,091	$	1,552	$	986
Total assets		34,318		33,438		34,087		33,735		32,550
Deferred income taxes		1,248		1,503		1,534		1,691		1,811
Long-term debt:
Current portion		349		336		335		609		1,819
Long-term portion		14,436		14,981		15,069		14,810		14,974
Total liabilities		20,920		21,398		21,704		21,769		22,033
Redeemable noncontrolling interests		358		443		383		442		415
Total Discovery, Inc. stockholders’ equity		11,611		10,087		10,464		9,891		8,386
Total equity	$	13,040	$	11,597	$	12,000	$	11,524	$	10,102

2021

•

In June 2021, Discovery sold its Great American Country network to Hicks Equity Partners for a sale price of $90 million. Discovery recorded gain of $76 million, based on net assets disposed of $14 million.

•

Certain sporting events that Discovery has rights to were canceled or postponed, thereby eliminating or deferring the related revenues and expenses, including the Tokyo 2020 Olympic Games, which occurred in July and August 2021. The postponement of the Olympic Games deferred both Olympic-related revenues and significant expenses from fiscal year 2020 to fiscal year 2021.

2020

•

Discovery recognized a goodwill impairment charge totaling $121 million for its Asia-Pacific reporting unit.

2019

•

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, which requires lessees to recognize almost all of their leases on the balance sheet by recording a right-of-use asset and lease liability. Discovery adopted ASU 2016-02 effective January 1, 2019 and such adoption resulted in recognition of operating lease right-of-use assets of $342 million and operating lease liabilities of $372 million. The operating lease right-of use assets recorded upon adoption were offset by prepaid and deferred rent balances and ASC 420 liabilities totaling approximately $30 million. In addition, capital lease obligations totaling $252 million as of December 31, 2018 (known as finance lease liabilities effective January 1, 2019) were reclassified from current and noncurrent debt to other components of current and noncurrent liabilities to conform with the new presentation. The adoption did not affect the pattern of expense recognition or cash flow presentation.

•

Discovery and BBC Studios dissolved their 50/50 joint venture, UKTV, a British multi-channel broadcaster (“UKTV”), with Discovery taking full control of UKTV’s three lifestyle channels. Total net assets received in the dissolution of UKTV was $396 million.

•

Discovery recognized a goodwill impairment charge totaling $155 million for its Asia-Pacific reporting unit.

2018

•

In March 2018, Discovery acquired Scripps. Scripps is a wholly owned subsidiary of Discovery whose total assets and total revenues represented approximately 55% and 29%, respectively, of Discovery’s related consolidated financial statement amounts as of and for the year ended December 31, 2018.

•

In April 2018, Discovery sold an 88% controlling equity stake in its Education Business to Francisco Partners for a sale price of $113 million. Discovery recorded a gain of $84 million based on net assets disposed of $44 million, including $40 million of goodwill.

•

For the year ended December 31, 2018, Discovery incurred transaction and integration costs for the Scripps acquisition of $110 million.

Summary Historical Consolidated Financial Information of AT&T

The following summary historical consolidated financial information of AT&T as of and for the years ended December 31, 2020, 2019 and 2018 has been derived from AT&T’s historical audited consolidated financial statements and the notes thereto which are incorporated by reference into this proxy statement/prospectus. The following summary historical consolidated financial information of AT&T as of September 30, 2021 and for the nine months ended September 30, 2021 and 2020 has been derived from AT&T’s unaudited condensed consolidated financial statements and the notes thereto which are incorporated by reference into this proxy statement/prospectus. The summary historical consolidated financial information is qualified in its entirety by, and should be read in conjunction with, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and AT&T’s consolidated financial statements and unaudited condensed consolidated financial statements and the notes thereto included in AT&T’s Annual Report on Form 10-K for the year ended December 31, 2020, Current Report on Form 8-K, as filed with the SEC on June 21, 2021 (which updates AT&T’s audited financial statements contained in its Annual Report on Form 10-K for the fiscal year ended December 31, 2020) and Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021, each of which is incorporated by reference into this proxy statement/prospectus. See “Where You Can Find More Information; Incorporation by Reference.” AT&T’s historical consolidated financial information may not be indicative of the future performance of WBD following the Transactions. See “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors.”


Selected Financial Data	As of and for the Nine Months Ended				As of and for the Year Ended
	September 30, 2021		September 30, 2020		2020			2019		2018
	(Unaudited)
In millions except as noted
Operating results
Operating revenues	$	127,906	$	126,069	$	171,760		$	181,193	$	170,756
Operating expenses	$	109,867	$	108,919	$	165,355		$	153,238	$	144,660
Operating income	$	18,039	$	17,150	$	6,405		$	27,955	$	26,096
Net income	$	16,089	$	9,694	$	(3,821	)	$	14,975	$	19,953
Net income attributable to common stock	$	14,882	$	8,569	$	(5,369	)	$	13,900	$	19,370
Earnings per share attributable to common stock
Basic	$	2.07	$	1.19	$	(0.75	)	$	1.90	$	2.85
Diluted	$	2.07	$	1.19	$	(0.75	)	$	1.89	$	2.85
Cash dividends declared per common share	$	1.56	$	1.56	$	2.08		$	2.05	$	2.01
Balance Sheet
Total assets	$	547,107	$	538,553	$	525,761		$	551,669	$	531,864
Long-term debt	$	155,406	$	152,980	$	153,775		$	151,309	$	166,250
Total debt	$	179,161	$	158,878	$	157,245		$	163,147	$	176,505

Summary Historical Combined Financial Information of the WarnerMedia Business

The following summary historical combined financial information of the WarnerMedia Business as of and for the years ended December 31, 2020 and 2019 and as of and for the nine months ended September 30, 2021 has been derived from the WarnerMedia Business’s audited combined financial statements and the notes thereto which are included elsewhere in this proxy statement/prospectus and the summary historical combined financial information for the nine months ended September 30, 2020 has been derived from the WarnerMedia Business’s unaudited combined financial statements. The summary historical combined financial information is qualified in its entirety by, and should be read in conjunction with, “Management’s Discussion and Analysis of Financial Condition and Results of Operations of the WarnerMedia Business” and the WarnerMedia Business’s audited and unaudited combined financial statements and the notes thereto included elsewhere in this proxy statement/prospectus. The WarnerMedia Business’s historical combined financial information is not indicative of the future performance of WBD following the Transactions. See “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors.”


(In millions)	For the Nine Months Ended September 30, 2021		For the Nine Months Ended September 30, 2020		For the Year Ended December 31, 2020			For the Year Ended December 31, 2019
			(Unaudited)
Operating Results
Operating revenues	$	24,163	$	20,439	$	28,146		$	32,926
Operating expenses	$	22,595	$	19,735	$	27,733		$	29,843
Operating income	$	1,568	$	704	$	413		$	3,083
Income (loss) before income taxes	$	1,185	$	507	$	(63	)	$	2,414
Net income	$	952	$	429	$	12		$	2,280

Summary Unaudited Pro Forma Condensed Combined Financial Information of Discovery and the WarnerMedia Business

The following summary unaudited pro forma condensed combined financial information of Discovery and the WarnerMedia Business is presented for informational purposes only and is not necessarily indicative of the financial position or results that would have occurred had the events been consummated as of the dates indicated, nor is it indicative of any future results. See “Risk Factors” for additional discussion of risk factors associated with the unaudited pro forma financial statements.

This information is only a summary and has been derived from and should be read in conjunction with Discovery’s audited consolidated financial statements and the notes thereto contained in Discovery’s Annual Report on Form 10-K for the year ended December 31, 2020 and Discovery’s unaudited condensed consolidated financial statements and the notes thereto contained in Discovery’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021, which are incorporated by reference into this proxy statement/prospectus, the WarnerMedia Business’s audited combined financial statements and the notes thereto included elsewhere in this proxy statement/prospectus and the more detailed unaudited pro forma condensed combined financial statements of Discovery and the WarnerMedia Business and the notes thereto included elsewhere in this proxy statement/prospectus. See “Where You Can Find More Information; Incorporation by Reference,” “Combined Financial Statements of the WarnerMedia Business” and “Unaudited Pro Forma Condensed Combined Financial Statements of Discovery and the WarnerMedia Business.”


Unaudited Pro forma Condensed Combined Statement of Operations Information:	Nine Months Ended September 30, 2021			Year Ended December 31, 2020
	(In millions)
Revenues:
Advertising	$	7,847		$	9,559
Distribution		15,680			18,454
Content		8,859			9,871
Other		700			842

Total revenues		33,086			38,726

Cost and expenses:
Costs of revenues		18,162			20,176
Selling, general and administrative		8,157			10,069
Depreciation and amortization		5,346			7,109
Impairment of goodwill and other intangible assets		—			130
Restructuring and other charges		63			1,521
Loss on disposition		151			50

Total costs and expenses		31,879			39,055

Operating income		1,207			(329	)
Interest expense, net		(1,534	)		(1,883	)
Loss on extinguishment of debt		(10	)		(76	)
Income (loss) from equity investees, net		(9	)		(254	)
Other income (expense), net		394			(82	)

Income (loss) before income taxes		48			(2,624	)
Income tax (expense) benefit		219			613

Net income (loss)		267			(2,011	)
Net income attributable to noncontrolling interest		(116	)		(124	)
Net income attributable to redeemable noncontrolling interest		(22	)		(12	)

Net income (loss) attributable to common stockholders	$	129		$	(2,147	)


Unaudited Pro Forma Condensed Combined Balance Sheet Information:	As of September 30, 2021
	(In millions)
Assets
Cash and cash equivalents	$	9,508
Total current assets		19,409
Total assets		158,772
Liabilities and Equity
Total current liabilities		13,988
Noncurrent portion of debt		57,761
Total liabilities		98,090
Total equity		60,324

Summary Historical Market Price

Historical market price data for Spinco does not exist, as Spinco currently is a wholly owned subsidiary of AT&T. As such, shares of Spinco common stock are not currently listed on a public stock exchange and are not publicly traded. Therefore, no market data is available for Spinco.

Shares of Discovery Series A common stock, Discovery Series B common stock and Discovery Series C common stock currently trade on Nasdaq under the symbols “DISCA,” “DISCB” and “DISCK,” respectively. Shares of AT&T common stock currently trade on the New York Stock Exchange (“NYSE”) under the symbol “T.” The following table sets forth the closing price per share of Discovery Series A common stock, Discovery Series B common stock and Discovery Series C common stock and AT&T common stock as reported on Nasdaq and the NYSE, respectively, as of May 14, 2021, the last trading day prior to the public announcement of the Transactions. For current price information, you are urged to consult publicly available sources.


Closing Price Per Share of:	As of May 14, 2021
DISCA	$	35.65
DISCB	$	70.44
DISCK	$	30.74
T	$	32.24

RISK FACTORS

You should carefully consider the following risks, together with the other information contained or incorporated by reference in this proxy statement/prospectus and the exhibits hereto. Some of the risks described below relate principally to the business and the industry in which WBD will operate after the Transactions, while others relate principally to the Transactions and the indebtedness of Discovery and WBD. The remaining risks relate principally to the securities markets generally and ownership of shares of WBD common stock. For a discussion of additional uncertainties associated with forward-looking statements in this proxy statement/prospectus, please see “Cautionary Note Regarding Forward-Looking Statements.” In addition, you should consider the risks associated with Discovery’s business that appear in Discovery’s Annual Report on Form 10-K for the year ended December 31, 2020 and Discovery’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2021, June 30, 2021 and September 30, 2021, which are incorporated by reference into this proxy statement/prospectus. For a description of the material risks relating to AT&T and the WarnerMedia Business, please read “Risk Factors” in AT&T’s Annual Report on Form 10-K for the year ended December 31, 2020 and AT&T’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, which are incorporated by reference in this proxy statement/prospectus. See “Where You Can Find More Information; Incorporation by Reference” for more information about the documents incorporated by reference in this proxy statement/prospectus.

Any of the following risks could materially adversely affect the business, financial condition and results of operations of Discovery, the WarnerMedia Business or WBD and the actual outcome of matters as to which forward-looking statements are made in this proxy statement/prospectus. In such case, the market price of WBD common stock could decline, and you could lose all or part of your investment. The risks described below are not the only risks that Discovery and the WarnerMedia Business currently face or that WBD will face after the completion of the Transactions. Additional risks and uncertainties not currently known or that are currently expected to be immaterial may also materially adversely affect WBD’s business, financial condition and results of operations or the market price of WBD common stock in the future. Past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods.

Risk Factors Relating to the Transactions

The completion of the Transactions is subject to numerous conditions, as described in this proxy statement/prospectus, including the occurrence of certain events contemplated by the Merger Agreement and the Separation Agreement (such as the Separation, approvals from governmental agencies and the receipt of Discovery stockholder approval for the Charter Amendment and the Share Issuance). Neither AT&T nor Discovery can make any assurances that the Transactions will be completed on the terms or timeline currently contemplated, or at all. Each of AT&T and Discovery has and will continue to expend time and resources and incur expenses related to the proposed Transactions. These expenses must be paid regardless of whether the Transactions are completed.

Although Discovery and AT&T have agreed to use reasonable best efforts, subject to certain limitations, to make certain governmental filings and obtain the required governmental approvals or expiration or earlier termination of relevant waiting periods, as the case may be, there can be no assurance that the relevant waiting periods will expire or be terminated or that the relevant approvals will be obtained. As a condition to approving the Transactions, these governmental authorities may impose conditions, terms, obligations or restrictions or require divestitures or place restrictions on the conduct of WBD’s business after the completion of the Transactions. There can be no assurance that regulators will not impose conditions, terms, obligations or restrictions and that such conditions, terms, obligations or restrictions will not have the effect of delaying or

preventing completion of the Transactions or imposing additional material costs on or materially limiting the revenues of WBD following the Transactions, or otherwise adversely affecting, including to a material extent, WBD’s business, financial condition and results of operations after the completion of the Transactions. If Discovery or AT&T is required to divest assets or businesses, there can be no assurance that Discovery or AT&T will be able to negotiate such divestitures expeditiously or on favorable terms or that the governmental authorities will approve the terms of such divestitures. There can be no assurance that these conditions, terms, obligations or restrictions will not result in the abandonment of the Transactions.

In addition, Spinco will need to obtain debt financing to finance, in part, the Special Cash Payment and the Additional Amount and to otherwise fund the other Transactions and to pay the related transaction fees and expenses. Although the Commitment Letter and the Spinco Term Loan Credit Agreement have been entered into with various lenders, the obligations of the lenders under the Commitment Letter and the Spinco Term Loan Credit Agreement are subject to the satisfaction or waiver of customary conditions, including, among others, the absence of any material adverse effect on Discovery. Accordingly, there can be no assurance that these conditions will be satisfied or, if not satisfied, waived by the lenders. Furthermore, increased volatility and disruptions in the U.S. and global financial and equity markets may make it more difficult for Spinco to obtain financing or increase the cost of obtaining financing. If Spinco is not able to obtain alternative financing on commercially reasonable terms, it could prevent the completion of the Transactions or materially adversely affect WBD’s business, financial condition and results of operations if the Transactions are ultimately completed.

If completed, the Transactions may not be successful or achieve their anticipated financial and other benefits.

If the Transactions are completed, WBD may not be able to successfully realize anticipated growth opportunities and synergies, or integrate Discovery’s business and operations with the WarnerMedia Business’s business and operations. See “—Risk Factors Relating to the Combined Company Following the Transactions—Although Discovery expects that the Transactions will result in synergies and other benefits, WBD may not realize those benefits because of difficulties related to integration, the achievement of such synergies, and other challenges.”

After the Transactions, WBD will have significantly more revenue, expenses, assets and employees than Discovery did prior to the Transactions. Upon the completion of the Transactions, WBD will also assume certain liabilities of the WarnerMedia Business and take on other obligations (including collective bargaining agreements and multiemployer pension plans with respect to transferred employees). WBD may not successfully or cost-effectively integrate the WarnerMedia Business’s business and operations into Discovery’s existing business and operations. Even if WBD is able to integrate the combined businesses and operations successfully, this integration may not result in the realization of the full benefits of the synergies and other opportunities that Discovery currently expects from the Transactions within the anticipated time frame, or at all.

Failure to complete the Transactions in a timely manner or at all could adversely affect Discovery’s stock price as well as its future business and its financial condition and results of operations.

The satisfaction of the required conditions to the Closing could delay the completion of the Transactions for a significant period of time or prevent it from occurring. Further, there can be no assurance that the conditions to the Closing will be satisfied or waived or that the Transactions will be completed.

If the Transactions are not completed in a timely manner or at all, Discovery’s ongoing business may be adversely affected as follows:

•

Discovery may experience negative reactions from the financial markets, and Discovery’s stock price could decline, including if and to the extent the current market price reflects an assumption that the Transactions will be completed;

•

Discovery may experience negative reactions from employees, customers, suppliers or other third parties;

•

Discovery may be subject to litigation, including stockholder litigation relating to the Reclassification and other matters relating to the Transactions, which could result in significant costs and expenses;

•

Discovery management’s focus may have been diverted from day-to-day business operations and pursuing other opportunities that could have been beneficial to Discovery; and

•

Discovery’s costs of pursuing the Transactions may be higher than anticipated and significant expenses, such as for legal, advisory and financial services, generally must be paid regardless of whether the Transactions are completed.

In addition to the above risks, Discovery may be required, under certain circumstances, to pay AT&T the Discovery Termination Fee and/or to reimburse or indemnify AT&T for certain of its expenses. If the Transactions are not completed, there can be no assurance that these risks will not materialize and will not materially adversely affect Discovery’s stock price, business, financial condition and results of operations.

Discovery stockholders immediately prior to the completion of the Transactions will, in the aggregate, own a significantly smaller percentage of WBD immediately after the completion of the Transactions. Immediately following the completion of the Transactions, it is expected that holders (or, if such holders exchange all of their shares of AT&T common stock in the Exchange Offer, also former holders) of AT&T common stock that received shares of Spinco common stock in the Distribution will own approximately 71% of the outstanding shares of WBD common stock on a fully diluted basis and holders of Discovery capital stock as of immediately prior to the Reclassification and the Merger will own approximately 29% of the outstanding shares of WBD common stock on a fully diluted basis, in each case, excluding any overlaps in the pre-Merger AT&T and Discovery stockholder bases, as described under “The Transactions—Calculation of the Merger Consideration.” Consequently, existing Discovery stockholders, collectively, will be able to exercise less influence over the management and policies of WBD than they will be able to exercise over Discovery management and its policies immediately prior to the completion of the Transactions.

The Merger Agreement contains provisions that may discourage other companies from trying to acquire Discovery.

The Merger Agreement contains provisions that may discourage a third party from submitting a business combination proposal to Discovery prior to the completion of the Transactions that might result in greater value to Discovery stockholders than the Transactions. The Merger Agreement generally prohibits Discovery from soliciting any alternative transaction proposal and Discovery must hold a meeting of its stockholders to vote on the Charter Amendment and the Share Issuance even if an unsolicited alternative transaction proposal is received that the Discovery Board determines is superior to the Transactions. In addition, before the Discovery Board may withdraw or modify its recommendation in response to, or terminate the Merger Agreement to enter into an agreement with respect to, a superior proposal, AT&T is required to be given the opportunity to negotiate with Discovery to modify the terms of the Transactions. If the Merger Agreement is terminated by Discovery or AT&T in certain limited circumstances, Discovery may be obligated to pay the Discovery Termination Fee to AT&T, which would represent an additional cost for a potential third party seeking a business combination with Discovery.

The calculation of the number of shares of WBD common stock to be issued to holders of Spinco common stock in the Merger is based on fixed percentages and will not be adjusted if the relative value of the business or assets of the WarnerMedia Business and Discovery change prior to the completion of the Merger. Discovery may

not be permitted to terminate the Merger Agreement because of changes in the value of the WarnerMedia Business or its assets. Discovery will not be permitted to terminate the Merger Agreement solely because of changes in Discovery’s stock price.

The pendency of the Transactions could have an adverse effect on Discovery’s stock price as well as the business, financial condition and results of operations of Discovery and the WarnerMedia Business.

The pendency of the Transactions could cause disruptions to Discovery’s and the WarnerMedia Business’s businesses or business relationships, which could have an adverse impact on results of operations. Parties with which Discovery or the WarnerMedia Business have business relationships, including distributors, advertisers and content providers, may be uncertain as to the future of such relationships and may delay or defer certain business decisions, seek alternative relationships with third parties or seek to alter their present business relationships with Discovery or the WarnerMedia Business. Parties with which Discovery or the WarnerMedia Business otherwise may have sought to establish business relationships may also seek alternative relationships with third parties. In addition, current and prospective employees of Discovery or the WarnerMedia Business may experience uncertainty regarding their future roles with WBD, which might adversely affect Discovery’s and the WarnerMedia Business’s ability to retain, recruit and motivate key personnel and maintain overall employee morale. Should they occur, any of these events could materially adversely affect Discovery’s stock price or harm the business, financial condition and results of operations of Discovery or the WarnerMedia Business.

Discovery’s estimates and judgments related to the acquisition accounting models used to record the purchase price allocation could be inaccurate.

Discovery management will make significant accounting judgments and estimates in connection with the application of acquisition accounting under generally accepted accounting principles in the United States (“GAAP”) and the underlying valuation models. WBD’s business, financial condition and results of operations could be materially adversely impacted in future periods if Discovery management’s accounting judgments and estimates related to these models prove to be inaccurate.

WBD could be required to recognize impairment charges related to goodwill and other intangible assets.

The Transactions will add approximately $78.1 billion of goodwill and other intangible assets to Discovery’s consolidated balance sheet. In accordance with GAAP, Discovery management periodically assesses these assets to determine if they are impaired. Significant negative industry or economic trends, including the ongoing effects of the COVID-19 pandemic, disruptions to WBD’s business, inability to effectively integrate acquired businesses, unexpected significant changes or planned changes in use of the assets, divestitures and market capitalization declines may impair WBD’s goodwill and other intangible assets. Any charges relating to such impairments could materially adversely affect WBD’s results of operations in the periods recognized.

Discovery expects to incur significant costs associated with the Transactions that could adversely affect the business, financial condition and results of operations of WBD following the completion of the Transactions.

In connection with the Transactions, Discovery has incurred and will continue to incur significant costs, expenses and fees for professional services, such as legal, financial and accounting advice and services, and other transaction costs, including costs related to the Discovery special meeting, the Reclassification, the issuance, registration and listing of WBD common stock, consulting and other services related to integration planning, transition services provided to Spinco by AT&T, and adjustments to the Special Cash Payment for expenses of the WarnerMedia Business. The substantial majority of these costs will be non-recurring expenses relating to the Transactions, and many of these costs are payable regardless of whether or not the Transactions are completed. Discovery anticipates that it will incur approximately $0.7 billion of costs relating to the signing and closing

of the Transactions; these transaction costs do not include an additional approximately $1.5 billion in one-time cash costs during the first year following the completion of the Transactions that Discovery believes will be necessary to realize the anticipated cost synergies from the Transactions. No assurances of the timing or amount of synergies able to be captured, or the timing or amount of costs necessary to achieve those synergies, can be provided.

Some of the factors affecting the costs associated with the Transactions include the complexity and timing of the completion of the Transactions, the resources required in integrating the WarnerMedia Business with Discovery’s existing businesses and the length of time during which transition services are provided to Spinco by AT&T. The amount and timing of any such charges could materially adversely affect WBD’s business, financial condition and results of operations following the completion of the Transactions. Discovery could also be subject to litigation related to the proposed Merger, which could prevent or delay the completion of the Transactions and result in the incurrence of additional significant costs and expenses.

Discovery is required to abide by potentially significant restrictions which could limit Discovery’s ability to undertake certain corporate actions that otherwise could be advantageous.

The Merger Agreement restricts Discovery from taking specified actions without AT&T’s consent until the Transactions are completed or the Merger Agreement is terminated, including making certain significant acquisitions or investments, entering into certain new lines of business, incurring certain indebtedness in excess of certain thresholds, making non-ordinary course capital expenditures, amending or modifying certain contracts, divesting certain assets (including certain intellectual property rights) and making certain non-ordinary course changes to personnel and employee compensation. These restrictions and other more fully described in “The Merger Agreement—Conduct of Business Pending the Merger” may affect Discovery’s ability to execute its business strategies and attain its financial and other goals and may impact Discovery’s business, financial condition and results of operations.

The Tax Matters Agreement generally prohibits AT&T, Spinco and Discovery and their respective subsidiaries from taking certain actions that could cause the Distribution, the Merger or certain related Transactions to fail to qualify as tax-free transactions. Among other things, subject to certain exceptions, for a two-year period following the Distribution Date, Discovery and its subsidiaries immediately prior to the effective time of the Merger and, after the effective time of the Merger, the entities comprising the Spinco Group, including any predecessors or successors thereto (other than those entities comprising the AT&T Group) (the “Discovery Group”), may not:

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enter into any transaction or series of transactions as a result of which one or more persons would (directly or indirectly) acquire an amount of stock of Spinco or WBD that, when combined with certain other changes in ownership of stock in Spinco or WBD (including the Merger), would equal or exceed 45% of the stock of Spinco or WBD, as applicable, by vote or value;

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merge or consolidate WBD with any other person, unless WBD is the survivor of the merger or consolidation;

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fail to be actively engaged in the conduct of the active trade or business described in the IRS Ruling;

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sell or otherwise dispose of more than 35% of the gross assets of Spinco and its subsidiaries or more than 35% of the gross assets of the WarnerMedia Business;

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redeem or repurchase any stock of WBD, other than in certain open-market or similar transactions;

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take any action affecting the voting rights of the stock of WBD;

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liquidate or partially liquidate Spinco for U.S. federal income tax purposes;

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merge Spinco with any other person, unless Spinco is the survivor of the merger;

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take any action or actions that, individually or in the aggregate, would be reasonably likely to result in one or more persons acquiring stock, directly or indirectly, representing a 50% or greater interest in

Spinco or to adversely affect the tax-free status of the Distribution, the Merger, or certain related Transactions; or

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adopt a plan or enter into any agreement to do any of foregoing.

If the Discovery Group intends to take any action that is otherwise prohibited by the Tax Matters Agreement (as described above), prior to taking such action WBD is required to (1) obtain a favorable IRS ruling or an unqualified tax opinion, in each case, reasonably satisfactory to AT&T to the effect that such action will not affect the tax-free status of the Distribution, the Merger or such related Transactions (and AT&T will be required to cooperate in good faith in connection with WBD’s efforts to obtain such IRS ruling or unqualified tax opinion) or (2) receive from AT&T a written waiver of the requirement to obtain such IRS ruling or unqualified tax opinion. These restrictions may limit WBD’s ability to pursue certain strategic transactions or engage in other transactions, including using WBD common stock to make acquisitions and in connection with equity capital market transactions or disposing of certain assets that might increase the value of the combined company. See “Other Agreements Related to the Transactions—Tax Matters Agreement.”

The Distribution could result in significant tax liability, and Discovery may be obligated to indemnify AT&T for any such tax liability imposed on AT&T.

The completion of the Distribution, the Merger and certain related Transactions are conditioned upon the receipt by AT&T, with a copy to Discovery, of (1) the Tax Opinions to the effect that, among other things, for U.S. federal income tax purposes, (a) the Distribution, taken together with certain related Transactions, will qualify as a “reorganization” under Section 368(a)(1)(D) of the Code and a tax-free distribution under Section 355 of the Code and that certain other related Transactions will qualify for their intended tax-free treatment and (b) the Merger will qualify as a “reorganization” under Section 368(a) of the Code and (2) the IRS Ruling regarding the qualification of the Distribution and certain related Transactions for tax-free treatment. Provided that such Transactions so qualify, AT&T stockholders generally will not recognize any income, gain or loss for U.S. federal income tax purposes upon the receipt of Spinco common stock in the Distribution or WBD common stock in the Merger (except for any gain or loss attributable to the receipt of cash in lieu of fractional shares of WBD common stock) and AT&T generally will not recognize income, gain or loss for U.S. federal income tax purposes, other than as a result of certain intercompany transactions undertaken prior to or in anticipation of the Distribution, potentially gain to the extent the Special Cash Payment exceeds AT&T’s adjusted tax basis in the WarnerMedia Business and in certain other circumstances.

In rendering the Tax Opinions, AT&T’s tax counsel will rely on, among other things, (1) customary representations and covenants made by AT&T, Spinco and Discovery, (2) specified assumptions, including an assumption regarding the completion of the Distribution, Merger, and certain related Transactions in the manner contemplated by the Transaction Documents and (3) if the IRS Ruling is obtained, the IRS Ruling. If any of those representations, covenants or assumptions is inaccurate, or the facts upon which the Tax Opinions will be based are materially different from the facts at the time of the Distribution, the conclusions expressed in the Tax Opinions may be incorrect and the Distribution may not qualify (in whole or part) for tax-free treatment. Opinions of counsel are not binding on the IRS. As a result, to the extent a conclusion expressed in the Tax Opinions is not also covered in the IRS Ruling, such conclusion could be challenged by the IRS, and if the IRS prevails in such challenge, the tax consequences to AT&T and its stockholders could be materially less favorable. Additionally, although the IRS Ruling would generally be binding on the IRS, AT&T, Spinco and Discovery will not be able to rely on the IRS Ruling if the factual representations made to the IRS in connection with the IRS Ruling request prove to be inaccurate or incomplete in any material respect, or if undertakings made to the IRS in connection with the request for the IRS Ruling are not satisfied. If this were to occur, the Distribution (including the Exchange Offer and Clean-Up Spin-Off) may not qualify (in whole or part) for tax-free treatment. As a result, the tax consequences to AT&T and its stockholders could be materially less favorable. See “Material U.S. Federal Income Tax Consequences.”

Even if the Distribution were otherwise to qualify generally for non-recognition treatment under Sections 368(a)(1)(D) and 355 of the Code, the Distribution would be taxable to AT&T (but not to AT&T stockholders)

pursuant to Section 355(e) of the Code if one or more persons acquire a 50% or greater interest (measured by vote or value) in the stock of AT&T or Spinco, directly or indirectly (including through acquisitions of the stock of WBD after the completion of the Merger), as part of a plan or series of related transactions that includes the Distribution. For this purpose, any acquisitions of AT&T or Spinco common stock (including through acquisitions of the stock of WBD after the completion of the Merger) within the period beginning two years before the Distribution and ending two years after the Distribution are presumed to be part of such a plan, although AT&T, Spinco or WBD, as the case may be, may be able to rebut that presumption, depending on the facts and circumstances. For purposes of this test, the Merger will be treated as part of such a plan. If the IRS were to determine that other acquisitions of AT&T common stock or Spinco common stock (including through acquisitions of the stock of WBD after the completion of the Merger), either before or after the Distribution, were part of a plan or series of related transactions that included the Distribution, such determination, if sustained, could result in the recognition of a material amount of taxable gain by AT&T under Section 355(e) of the Code.

In general, if the Discovery Group (1) breaches certain representations and warranties made by Discovery (or by Spinco solely to the extent relating to any tax period beginning after the Merger) in the tax representation letters relating to the Transactions or the IRS Ruling or (2) takes certain actions that are generally prohibited by the Tax Matters Agreement (as described in further detail above), without regard to whether WBD obtained an IRS ruling or an unqualified tax opinion or received AT&T’s prior written consent to take such action, and such breach or action results in indemnifiable tax-related losses (e.g., increased taxes, penalties and interest) under the Tax Matters Agreement, the Discovery Group generally is required to indemnify AT&T for such tax-related losses. If the Distribution were to be taxable to AT&T, and the Discovery Group were required to indemnify AT&T for tax-related losses, then this indemnification obligation could be substantial and could have a material adverse effect on Discovery.

In addition, changes in tax law could adversely affect the intended tax treatment of the Transactions or could adversely affect AT&T’s ability to receive the Tax Opinions or IRS Ruling or AT&T’s or WBD’s ability to rely on the Tax Opinions or IRS Ruling. For example, legislative proposals in the United States have included provisions that relate to the tax treatment of the Transactions. While the most recent versions of such proposals are not expected to materially impact the intended tax treatment of the Transactions, it is not possible at this time to predict the outcome of these or other proposals.

If the Merger does not qualify as a tax-free reorganization under Section 368 of the Code, participating AT&T stockholders that hold Spinco common stock may have significant tax liability.

As described above, the completion of the Merger is conditioned upon the receipt by AT&T, with a copy to Discovery, of a Tax Opinion substantially to the effect that the Merger will qualify as a “reorganization” under Section 368(a) of the Code. Provided that the Merger so qualifies, participating AT&T stockholders that hold Spinco common stock generally will not recognize any income, gain or loss for U.S. federal income tax purposes upon the receipt of WBD common stock in the Merger (except for any gain or loss recognized with respect to the receipt of cash in lieu of fractional shares of WBD common stock).

In rendering the Tax Opinion, AT&T’s tax counsel will rely on, among other things, (1) customary representations and covenants made by AT&T, Spinco and Discovery and (2) specified assumptions, including an assumption regarding the completion of the Distribution, Merger, and certain related Transactions in the manner contemplated by the Transaction Documents. If any of those representations, covenants or assumptions are inaccurate, or the facts upon which the Tax Opinion will be based are materially different from the facts at the time of the Merger, the conclusions expressed in the Tax Opinion may be incorrect and the Merger may not qualify (in whole or part) for tax-free treatment. Opinions of counsel are not binding on the IRS. As a result, the conclusions expressed in the Tax Opinion could be challenged by the IRS, and if the IRS prevails in such challenge, the tax consequences to Spinco and holders of Spinco common stock could be materially less favorable. If the Merger were taxable, holders of Spinco common stock would generally be considered to have

made a taxable sale of their shares of Spinco common stock to Discovery and would generally recognize taxable gain or loss on their receipt of WBD common stock in the Merger. See “Material U.S. Federal Income Tax Consequences.”

Some of Discovery’s directors and executive officers have interests in completing the Transactions that may be different from, or in addition to, those of other Discovery stockholders.

You should be aware that certain of Discovery’s directors and executive officers have financial interests in the Transactions that may be different from, or in addition to, the interests of Discovery stockholders generally. The members of the Discovery Board were aware of and considered these interests, among other matters, in reaching the determination to approve the terms of the Transactions, including the Merger, and in recommending to Discovery stockholders that they vote to approve the Charter Amendment proposals, the Share Issuance proposal and the “Golden Parachute” Compensation proposal.

For a description of the benefits that Discovery’s executive officers and directors may receive as a result of these interests, see “The Transactions—Interests of Discovery’s Directors and Executive Officers in the Transactions.”

Discovery and the WarnerMedia Business may have difficulty attracting, motivating and retaining executives and other employees in light of the Transactions.

Discovery and the WarnerMedia Business may have difficulty attracting, motivating and retaining executives and other employees in light of the Transactions. Uncertainty about the effect of the Transactions on the employees of Discovery and the WarnerMedia Business may impair Discovery’s and the WarnerMedia Business’s ability to attract, retain and motivate personnel until the Transactions are completed. Employee retention may be particularly challenging during the pendency of the Transactions, as employees may feel uncertain about their future roles with Discovery or the WarnerMedia Business after their combination. The departure of employees of Discovery or the WarnerMedia Business because of the uncertainty or perceived difficulties of integration or a desire not to become employees of WBD after the Transactions could have a material adverse effect on Discovery and the WarnerMedia Business and Discovery’s ability to realize the anticipated financial and other benefits of the Transactions.

Discovery, by acquiring Spinco in the Merger, will, on a consolidated basis, assume and be responsible for all WarnerMedia Liabilities following the completion of the Transactions, and is acquiring the WarnerMedia Assets on an “as is,” “where is” and “with all faults” basis.

As described in “The Separation Agreement,” the Spinco Group, which is being acquired by Discovery in the Merger, will accept, assume, agree to pay, discharge, fulfill, and to the extent applicable, comply with on a timely basis, the WarnerMedia Liabilities, regardless of (1) when or where such liabilities arose or arise (whether arising prior to, at or after the Distribution), (2) where or against whom such liabilities are asserted or determined, (3) whether arising from or alleged to arise from negligence, recklessness, violation of law, fraud or misrepresentation by any of AT&T and each of its subsidiaries and any legal predecessors thereto, but excluding any member of the Spinco Group (the “AT&T Group”), or any member of the Spinco Group, as the case may be, or any of their past or present respective directors, officers, employees, agents, subsidiaries or affiliates and (4) which entity is named in any action associated with any liability. The Separation Agreement further provides that the WarnerMedia Assets are being conveyed to Discovery on an “as is,” “where is” and “with all faults” basis, and while AT&T is subject to certain indemnification obligations in favor of Spinco and Discovery under the Separation Agreement, these are generally limited to indemnification for certain indemnifiable losses to the extent relating to, arising out of or resulting from the liabilities retained by AT&T (or any third party claims related thereto) or any breach by AT&T of any provision of the Separation Agreement. See “The Separation Agreement” for a detailed description of the WarnerMedia Liabilities that the Spinco Group is assuming in the Transactions.

Furthermore, while the Merger Agreement contains certain representations and warranties about the WarnerMedia Business, the Merger Agreement provides that all representations and warranties of the parties contained therein will not survive the effective time of the Merger. Accordingly, there are no remedies available to the parties with respect to any breach of representations of the parties to the Merger Agreement after the effective time of the Merger, except for certain rights the party may have under applicable law to bring a claim for intentional fraud with respect to any representation or warranty made in the Merger Agreement. With respect to the other Ancillary Agreements drafted at the time of the filing of this proxy statement/prospectus, other than in the case of the Tax Matters Agreement, they do not contain any representations or warranties in favor of Discovery.

As such, notwithstanding whether any WarnerMedia Liability or any issue with a WarnerMedia Asset is related to a breach of a representation or warranty in the Merger Agreement, Spinco, and by virtue of the Merger, WBD, will bear full responsibility for any and all WarnerMedia Liabilities and any issues with WarnerMedia Assets following the completion of the Transactions. To the extent any such WarnerMedia Liabilities are larger than anticipated, or an issue with a WarnerMedia Asset prohibits the WarnerMedia Business from performing as planned, they could have a material adverse impact on the business, financial condition and results of operations of WBD.

Risk Factors Relating to the Combined Company Following the Transactions

Sales of WBD common stock after the Transactions may negatively affect the market price of WBD common stock.

The shares of WBD common stock to be issued in the Transactions to holders of Spinco common stock will generally be eligible for immediate resale. The market price of WBD common stock could decline as a result of sales of a large number of shares of WBD common stock in the market after the completion of the Transactions or even the perception that these sales could occur.

It is possible that some AT&T stockholders would sell the WBD common stock they receive if, for reasons such as WBD’s business profile or market capitalization, WBD does not fit their investment objectives, or in the case of index funds, WBD is not a participant in the index in which they are investing. These sales, or the possibility that these sales may occur, may also make it more difficult for WBD to obtain additional capital by selling equity securities in the future at a time and at a price that it deems appropriate.

It is expected that the WBD common stock outstanding on a fully diluted basis following the Reclassification and immediately prior to the Merger will represent, in the aggregate, approximately 29% of WBD common stock outstanding on a fully diluted basis immediately following the Transactions. As a result of the Transactions, including the significant increase in outstanding WBD common stock and the Reclassification, the market price of WBD common stock could be significantly different from the reported closing prices on Nasdaq of Discovery Series A common stock, Discovery Series B common stock and Discovery Series C common stock prior to the completion of the Transactions.

The WarnerMedia Business is currently operated by AT&T. The WarnerMedia Business’s historical combined financial statements have been prepared on a “carve-out” basis from AT&T’s consolidated financial statements using the historical results of operations, assets and liabilities of the WarnerMedia Business and include allocations of expenses from AT&T. As a result, the WarnerMedia Business’s historical financial statements may not necessarily reflect what its financial condition and results operations would have been had the WarnerMedia Business operated as a standalone entity during the periods presented. For example, in preparing the financial statements of the WarnerMedia Business, AT&T made allocations of costs and AT&T

corporate expenses deemed to be attributable to the WarnerMedia Business. However, these costs and expenses reflect the costs and expenses attributable to the WarnerMedia Business operated as part of a larger organization and do not necessarily reflect costs and expenses that would be incurred by the WarnerMedia Business had it been operated independently or costs and expenses that would be incurred by WBD. As a result, the historical financial information of the WarnerMedia Business may not be a reliable indicator of future results, and actual results may be materially different from those reflected in the historical financial statements.

Because Discovery will combine with the WarnerMedia Business only upon completion of the Transactions, there is no available historical financial information that consolidates the financial results for the WarnerMedia Business and Discovery. The historical financial statements contained or incorporated by reference in this proxy statement/prospectus consist of the separate financial statements of AT&T, the WarnerMedia Business and Discovery.

The WarnerMedia Business’s historical combined financial statements have been prepared on a “carve-out” basis from AT&T’s consolidated financial statements using the historical results of operations, assets and liabilities of the WarnerMedia Business and include allocations of expenses from AT&T. As a result, the WarnerMedia Business’s historical financial statements may not necessarily reflect what its financial condition and results of operations would have been had the WarnerMedia Business operated as a standalone entity during the periods presented.

The unaudited pro forma condensed combined financial statements presented in this proxy statement/prospectus are for illustrative purposes only and are not intended to, and do not purport to, represent what WBD’s actual financial condition and results of operations would have been if the Transactions had occurred on the relevant dates. In addition, such unaudited pro forma condensed combined financial statements are based upon available information and certain assumptions of Discovery management as of the date of this proxy statement/prospectus. These assumptions, however, are only preliminary and will be updated only after the completion of the Transactions. The unaudited pro forma condensed combined financial statements have been prepared using the acquisition method of accounting, with Discovery as the accounting acquirer of the WarnerMedia Business based on consideration of the facts and circumstances described in “The Transactions—Accounting Treatment,” which may be subject to change. Under the acquisition method of accounting, the purchase price is allocated to the assets acquired and liabilities assumed in a business combination based on their respective fair values as of the merger date, with any excess purchase price allocated to goodwill. The pro forma purchase price allocation of the WarnerMedia Business’s assets acquired and liabilities assumed in the unaudited pro forma condensed combined financial statements is based on preliminary estimates of the fair values of the assets acquired and liabilities assumed. In arriving at the preliminary fair value estimates, Discovery management has considered the input of independent consultants based on a preliminary and limited review of the WarnerMedia Business’s assets and liabilities to be transferred to, or assumed by, directly or indirectly, Spinco in the Transactions. Following the Closing, Discovery management expects to complete the valuation of the WarnerMedia Business’s assets and liabilities at the level of detail necessary to finalize the required purchase price allocation. The final purchase price allocation could differ significantly from the allocation presented in the unaudited pro forma condensed combined financial statements. The unaudited pro forma condensed combined financial statements also do not reflect any anticipated revenue enhancements, cost savings, or operating synergies that WBD may achieve as a result of the Merger, the total expected costs to integrate the operations of Discovery and the WarnerMedia Business, or the total expected costs necessary to achieve such revenue enhancements, cost savings, or operating synergies. Accordingly, the unaudited pro forma condensed combined financial statements included in this proxy statement/prospectus do not reflect what Discovery’s financial

condition and results of operations would have been had Discovery and the WarnerMedia Business been a consolidated entity during all periods presented, or what WBD’s financial condition and results of operations will be in the future. Actual results may be materially different from those reflected in the unaudited pro forma condensed combined financial statements presented in this proxy statement/prospectus.

As part of a separate reporting segment of AT&T, the WarnerMedia Business has been able to receive services from AT&T. Following the Transactions, WBD will need to replace these services either by providing them internally from Discovery’s existing services or by obtaining them from unaffiliated third parties. These services include AT&T bundling HBO Max with some of its wireless and broadband offerings, certain administrative and operating functions of which the effective and appropriate performance is critical to the operations of the WarnerMedia Business and WBD following the Merger. AT&T will provide certain services on a transitional basis pursuant to the TSA. The duration of such services is subject to ongoing discussions but will be for a reasonable term to be set out in the Services Schedule to the TSA. WBD may be unable to replace these services in a timely manner or on terms and conditions as favorable as those the WarnerMedia Business currently receives from AT&T. The costs for these services could in the aggregate be higher than the combination of Discovery’s current costs and those reflected in the historical financial statements of the WarnerMedia Business. If WBD is unable to replace the services provided by AT&T or is unable to replace them at the same cost or is delayed in replacing the services provided by AT&T, WBD’s results of operations may be materially adversely impacted.

WBD’s business, financial condition and results of operations may be adversely affected following the Transactions if it cannot negotiate terms that are as favorable as those AT&T has received when WBD replaces contracts after the completion of the Transactions.

As a separate reporting segment of AT&T, the WarnerMedia Business has been able to receive benefits from being a part of AT&T and has been able to benefit from AT&T’s financial strength, extensive business relationships and purchasing power. Following the Merger, the WarnerMedia Business will be combined with Discovery, and WBD will not be able to leverage AT&T’s financial strength, may not have access to all of AT&T’s extensive business relationships and may not have purchasing power similar to what the WarnerMedia Business benefited from by being a part of AT&T prior to the Merger. In addition, some contracts that AT&T or its subsidiaries are a party to on behalf of the WarnerMedia Business require consents of third parties to assign them to Spinco in connection with the Transactions. There can be no assurance that AT&T, Spinco or Discovery will be able to obtain those consents, enter into new agreements with respect to those contracts if consents are not obtained or arrange for a lawful alternative arrangement to provide Spinco with the rights and obligations under such agreements. It is therefore possible, whether as a result of routine renegotiations of terms in the ordinary course of business, or as part of a request for consent or a replacement of a contract where consent has not been obtained, that WBD may not be able to negotiate terms as favorable as those AT&T has received previously for one or more contracts, and in the aggregate the loss or renegotiation of contracts in connection with the foregoing could materially adversely affect WBD’s business, financial condition and results of operations following the completion of the Transactions by increasing costs or decreasing revenues.

Although Discovery expects that the Transactions will result in synergies and other benefits, WBD may not realize those benefits because of difficulties related to integration, the achievement of such synergies, and other challenges.

Discovery and the WarnerMedia Business have operated and, until completion of the Transactions, will continue to operate, independently, and there can be no assurances that their businesses can be combined in a manner that allows for the achievement of any financial or other benefits. If WBD is not able to successfully

integrate the WarnerMedia Business with Discovery’s business or pursue its DTC strategy successfully, including coordinating its streaming services for global customers, the anticipated financial and other benefits, including synergies, of the Transactions may not be realized fully or at all or may take longer than expected to be realized. Specifically, the following issues, among others, must be addressed in combining the operations of Discovery and the WarnerMedia Business for WBD to realize the anticipated financial and other benefits of the Transactions:

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combining the businesses of Discovery and the WarnerMedia Business in a manner that permits WBD to achieve the synergies anticipated to result from the Transactions, the failure of which would result in the anticipated financial and other benefits of the Transactions not being realized in the time frame currently anticipated or at all;

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maintaining existing agreements with customers, distributors, providers, talent and vendors and avoiding delays in entering into new agreements with prospective customers, distributors, providers, talent and vendors;

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combining certain of the businesses’ corporate functions;

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determining whether and how to address possible differences in corporate cultures and management philosophies;

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integrating the businesses’ administrative, accounting and information technology infrastructure;

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integrating employees and attracting and retaining key personnel, including talent;

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managing the expanded operations of a significantly larger and more complex company, including with Discovery’s limited prior experience in running a studio or scripted content;

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coordinating the businesses’ DTC streaming services for global customers; and

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resolving potential unknown liabilities, adverse consequences and unforeseen increased expenses associated with the Transactions.

Even if the operations of the businesses of Discovery and the WarnerMedia Business are integrated successfully, the full benefits of the Transactions may not be realized, including, among others, the synergies that are expected. These benefits may not be achieved within the anticipated time frame or at all. Additional unanticipated costs may also be incurred in connection with the integration of the businesses of Discovery and the WarnerMedia Business. Further, it is possible that there could be loss of key Discovery or WarnerMedia Business employees, loss of customers, disruption of either or both of Discovery’s or the WarnerMedia Business’s ongoing businesses or unexpected issues, higher than expected costs and an overall post-completion process that takes longer than originally anticipated. All of these factors could materially adversely affect the market price of WBD common stock and WBD’s business, financial condition and results of operations.

The success of WBD will also depend on relationships with third parties and existing customers of Discovery and the WarnerMedia Business, which relationships may be affected by customer or third-party preferences or public attitudes about the Transactions. Any adverse changes in these relationships could adversely affect WBD’s business, financial condition and results of operations.

WBD’s success will depend on its ability to maintain and renew relationships with existing customers, business partners and other third parties of both Discovery and the WarnerMedia Business, and its ability to establish new relationships. There can be no assurance that the business of WBD will be able to maintain and renew existing contracts and other business relationships, or enter into or maintain new contracts and other business relationships, on acceptable terms, if at all. The failure to maintain important business relationships could have a material adverse effect on WBD’s business, financial condition and results of operations.

Upon completion of the Transactions, WBD expects to become responsible for up to approximately $43.0 billion of additional debt, including existing debt of the WarnerMedia Business to be assumed by the Spinco Group, and debt that may be incurred by Spinco and used on the Closing Date to finance, in part, the Special Cash Payment and the Additional Amount and to otherwise fund the other Transactions and to pay the related transaction fees and expenses, with the ultimate amount of such debt subject to adjustment, including for net working capital, as described in “The Separation Agreement—The Separation—Special Cash Payment, Payment of the Additional Amount and Post-Closing Adjustments.” In addition, subject to certain conditions, upon the completion of the Transactions, the available commitments under the Revolving Credit Agreement may be increased by $3.5 billion to an aggregate amount not to exceed $6.0 billion. The increased indebtedness could have the effect of, among other things, reducing WBD’s flexibility to respond to changing business and economic conditions, increasing its vulnerability to general adverse economic and industry conditions and limiting its ability to obtain additional financing in the future. In addition, following the completion of the Transactions, the amount of cash required to pay interest on WBD’s indebtedness levels will increase from the amount required to pay interest on Discovery’s indebtedness levels prior to the Transactions, and thus the demands on WBD’s cash resources will be greater than those on Discovery’s cash resources prior to the Transactions. The increased levels of indebtedness following the completion of the Transactions could also reduce funds available for capital expenditures, share repurchases, investments, mergers and acquisitions, and other activities and may create competitive disadvantages for WBD relative to other companies with lower debt levels.

Following the completion of the Transactions, Discovery’s corporate or debt-specific credit rating could be downgraded, which may increase WBD’s borrowing costs or give rise to a need to refinance existing indebtedness. If a ratings downgrade occurs, WBD may need to refinance existing debt or be subject to higher borrowing costs and more restrictive covenants when WBD incurs new debt in the future, which could reduce profitability and diminish operational flexibility.

WBD’s debt agreements following the completion of the Transactions will require Discovery to continue to comply with specified financial covenants that could limit WBD’s ability to take various actions, including incurring additional debt.

Discovery’s debt agreements currently contain, and WBD’s debt agreements will contain following the completion of the Transactions, restrictive covenants. The Revolving Credit Agreement governing Discovery’s senior revolving credit facility and the Spinco Term Loan Credit Agreement contain, and any agreements governing the Bridge Loans, if entered into, will contain, restrictive covenants, as well as requirements to comply with certain leverage and other financial maintenance tests. These covenants and requirements could limit WBD’s ability to take various actions, including incurring additional debt, guaranteeing indebtedness and engaging in various types of transactions, including mergers, acquisitions and sales of assets. These covenants could place WBD at a disadvantage compared to some of its competitors, who may have fewer restrictive covenants and may not be required to operate under these restrictions. Further, these covenants could have a material adverse effect on WBD’s business, financial condition and results of operations by limiting its ability to take advantage of financing, mergers and acquisitions or other opportunities.

If the results of operations of the WarnerMedia Business following the Transactions are below Discovery’s expectations, WBD may not achieve the increases in revenues and net earnings that Discovery expects as a result of the Transactions.

Discovery has projected that WBD will derive a majority of its revenues and net earnings from the operations of the WarnerMedia Business after the Transactions. Therefore, if the results of operations of the WarnerMedia Business following the Transactions are below Discovery’s expectations, WBD may not achieve

the results of operations that Discovery expects as a result of the Transactions. Some of the significant factors that could negatively impact the expected results of operations of the WarnerMedia Business, and therefore harm the expected future combined results of operations of WBD after the completion of the Transactions, include:

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more intense competitive pressure from existing or new competitors;

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fluctuations in the exchange rates in the jurisdictions in which the WarnerMedia Business operates;

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increases in promotional and operating costs for the WarnerMedia Business;

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a decline in the viewership or consumption of content provided by the WarnerMedia Business; and

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material variations in the results of operations of the WarnerMedia Business from Discovery’s expectations or projections of such results of operations, which were based on estimates and assumptions developed by Discovery management, any or all of which may prove to be incorrect or inaccurate.

The financial projections included herein are based upon estimates and assumptions made at the time they were prepared. If these estimates or assumptions prove to be incorrect or inaccurate, WBD’s actual operating results may differ materially from those forecasted for Discovery and the WarnerMedia Business.

The financial projections included in this proxy statement/prospectus under “The Transactions—Discovery Forecasts” and “The Transactions—WarnerMedia Projections” are subject to uncertainty and are based on estimates and assumptions developed by management of Discovery and AT&T, respectively, any or all of which may prove to be incorrect or inaccurate. The financial projections were reasonably prepared in good faith on bases reflecting the best available estimates and judgments of management of the applicable company as to the future operating results of Discovery and the WarnerMedia Business at the time they were prepared. Although presented with numerical specificity, the financial projections reflect numerous estimates and assumptions with respect to industry performance and competition, general business, economic, market and financial conditions and matters specific to the businesses of Discovery and the WarnerMedia Business, including other factors listed under “Risk Factors,” all of which are difficult to predict and many of which are outside the control of Discovery, AT&T and Spinco. There can be no assurance that the assumptions underlying the financial projections will be realized. In addition, the financial projections cover multiple years and such information by its nature becomes less predictive with each successive year. If these estimates or assumptions prove to be incorrect or inaccurate, WBD’s actual operating results may differ materially from those forecasted for Discovery and the WarnerMedia Business.

In addition, the financial projections for 2021 reflect, among other things, Discovery management’s or AT&T management’s, as applicable, estimates and assumptions regarding the continued impact of COVID-19 on 2021 expectations based on the experience of Discovery’s or the WarnerMedia Business’s business and such management’s evaluation of the WarnerMedia Business’s or Discovery’s business up to the date of preparation of the financial projections. However, Discovery management and AT&T management are unable to estimate or otherwise predict the extent of further COVID-19-related impacts on Discovery’s business and the WarnerMedia Business’s business which depend on highly uncertain and unpredictable future developments. Accordingly, the financial projections may be materially adversely affected by factors associated with COVID-19. See factors regarding the impact of COVID-19 under “Risk Factors.”

Many of the assumptions reflected in the financial projections are subject to change and such financial projections do not reflect revised prospects for the businesses of Discovery or the WarnerMedia Business, changes in general business or economic conditions or any other transactions, circumstances or events occurring after the date they were prepared, including the Transactions contemplated by the Merger Agreement and the Separation Agreement and the effect of any failure of the Merger or the other Transactions to occur. Discovery and AT&T have not updated and do not intend to update or otherwise revise their respective financial projections. There can be no assurance that the results reflected in any of the financial projections for Discovery and the WarnerMedia Business will be realized or that actual results for WBD will not materially vary from such financial projections.

The entertainment and media programming industries in which Discovery and the WarnerMedia Business operate are highly competitive. Discovery and the WarnerMedia Business compete with other programming networks for distribution, viewers and advertising, and face increased competitive pressure from subscription-based streaming services, DTC products and expansion by other companies—in particular, technology companies—into the content production and distribution space. Discovery and the WarnerMedia Business also compete for viewers with other forms of media entertainment, such as home entertainment (such as digital products), feature films, periodicals, interactive entertainment, user-generated content, live sports and other events, social media and diverse on-line and mobile activities. Internet-based advertising, including through websites and search engines, has seen significant growth, placing pressure on traditional advertising models tied to television networks, including on free-to-air, cable network and satellite delivered channels. The ability of Discovery and the WarnerMedia Business to compete successfully depends on a number of factors, including their abilities to consistently supply high-quality and popular content, access their targeted audience with appealing category-specific content, adapt to new technologies, distribution platforms and business models and achieve widespread distribution.

In addition, Discovery and the WarnerMedia Business compete with other studios and television production groups and independent producers that develop, produce, acquire and sell entertainment, sports and news content. Many television networks and online platforms are investing in such content. Discovery’s and the WarnerMedia Business’s television networks, premium pay-TV and basic tier television services and the discovery+ and HBO Max platforms also face competition from other television networks, online platforms/streaming video service providers and pay-TV service providers. As competition from these networks and service providers continues to increase, WBD may not be able to acquire or create popular entertainment, sports and news content or acquire it at a cost-effective price. As a result of an increasing number of market entrants in the programming space, Discovery and the WarnerMedia Business have seen upward pressure on programming costs in recent years, including in connection with the licensing and acquisition of entertainment, sports and news content from third parties, as well as with the commissioning of original production. WBD may also be impacted by such upward pressures driven by increasing investment by competitors. In certain international markets, regulations concerning content quotas or content investment requirements may be a further factor driving increasing programming costs. There can be no assurance that WBD will be able to compete successfully in the future against existing or new competitors, or that increasing competition will not have a material adverse effect on WBD’s business, financial condition and results of operations.

The success of WBD’s business will depend on the acceptance of WBD’s entertainment, sports and news content by its U.S. and foreign viewers, which may be unpredictable and volatile.

The production and distribution of entertainment, sports and news content are inherently risky businesses because the revenue derived and WBD’s ability to distribute its content, including through its own networks as well as third-party licensing, will depend primarily on consumer tastes and preferences that often change in unpredictable ways. WBD’s success will depend on its ability to consistently create and acquire content that meets the changing preferences of viewers in general, in special interest groups, in specific demographic categories and in various international marketplaces. WBD will need to invest substantial amounts in the production or acquisition and marketing of its entertainment, sports and news content before it learns whether such content will reach anticipated levels of popularity with consumers. WBD’s success with such content will depend on audience acceptance and viewership. Failing to gain the level of audience acceptance Discovery expects for entertainment, sports and news content may negatively impact WBD’s business, financial condition and results of operations.

The commercial success of WBD’s entertainment, sports and news content will also depend upon the quality and acceptance of competing content available. Other factors, including the availability of alternative

forms of entertainment and leisure time activities, WBD’s ability to maintain or develop strong brand awareness and target key audiences, general economic conditions, piracy, and growing competition for consumer discretionary spending, time and attention may also affect the audience for such content. Audience sizes for WBD’s media networks are critical factors that can affect both the volume and pricing of advertising revenue that WBD will receive with respect to advertising-supported services, and the extent of distribution and penetration and the license fees it will receive under agreements with its distributors with respect to its subscription-based services. The appeal, success and performance of its content with consumers, as well as with third-party licensees and other distribution partners, are also critical factors that can affect the revenue that WBD will receive with respect to its content-related business.

Consequently, reduced public acceptance of WBD’s entertainment, sports and news content may decrease its audience share and customer/viewer reach and materially adversely affect its business, financial condition and results of operations.

Technology and business models in Discovery’s and the WarnerMedia Business’s industries continue to evolve rapidly in an environment of fast-paced changes in consumer behavior as well as innovation. Changes to these business models include: (1) consumers’ increasing demand to consume video content on their own terms, including on the screen of their choice, at the time of their choice, and with enhanced functionality; (2) the presence of streaming services, which are increasing in number and some of which have a significant and growing subscriber base; (3) the proliferation of high speed internet connections and the expansion of 5G networks able to support high-quality streaming video within increasingly interactive and interconnected digital environments; and (4) the increased video consumption through subscription streaming services and time-delayed or time-shifted viewing of television programming through on-demand services and DVRs as well as the availability of video content through other distribution outlets, including digital home entertainment (such as electronic sell-through and transaction video-on-demand). Consumer behavior related to changes in content distribution, viewership and technological innovation are not entirely predictable but remain key factors in WBD’s economic model; such changes may accordingly materially adversely affect WBD’s business, financial condition and results of operations.

Consumers are increasingly viewing content on a time-delayed or on-demand basis from traditional distributors and from streaming services, apps and websites and on a wide variety of screens, such as televisions, tablets, mobile phones and other devices. The inability to meet consumer demands and expectations in today’s highly mobile, multi-screen and multi-platform environment for video delivery may affect the attractiveness of WBD’s offerings. Ineffective technology and product integration, lack of specific features and functionalities, poor interface design or ease of use, or platform performance issues, among other factors, may cause viewers to favor alternative offerings. The availability of on-demand feature films from streaming services may, depending in part on the timing of such availability relative to the theatrical release date, materially adversely affect the performance of features films at U.S. and international box offices. The underperformance of a feature film, especially an “event” film, at the global box office could result in lower than expected revenues for WBD from the license of the film to networks and streaming services, sales of the film in digital and physical forms and sales related to publishing and distribution of interactive entertainment or licenses for consumer products based on such film, including as a result of the COVID-19 pandemic. Additionally, devices that allow users to view television programs on a time-shifted basis and technologies that enable users to fast-forward or skip programming, including commercials, such as DVRs and portable digital devices and systems that enable users to store or make portable copies of content may affect the attractiveness of WBD’s offerings to advertisers and could therefore materially adversely affect its advertising revenues. In addition, there is increased demand for short-form, user-generated and interactive content, which have different economic models than Discovery’s and the WarnerMedia Business’s traditional content offerings. Likewise, distributors are seeking to offer smaller

programming packages known as “skinny bundles,” which are delivered at a lower cost than traditional offerings and sometimes allow consumers to create a customized package of networks that are gaining popularity among consumers. If WBD’s networks are not included in these packages or consumers favor alternative offerings, WBD may experience a decline in viewership and ultimately the demand for its programming, which could lead to lower distribution and advertising revenues.

There have also been declines in subscribers to the traditional cable bundle. In 2020, total subscribers to U.S. television networks and digital content services declined 5% while subscribers to Discovery’s fully distributed networks declined 3%. In order to respond to changes in content distribution models in its industry, Discovery has invested in, developed and launched DTC products including its discovery+ product and the WarnerMedia Business has most recently invested in, developed and launched the DTC platform, HBO Max. In connection with the Transactions, WBD expects to develop and implement a go-to-market strategy for its DTC products that coordinates and/or combines its offering of discovery+ and HBO Max. There can be no assurance, however, that WBD’s viewers will respond to its DTC products or that the DTC strategy will be successful, particularly given the increase in DTC products on the market. Each distribution model has different risks and economic consequences for WBD, so the rapid evolution of consumer preferences may have an economic impact that is not ultimately predictable. Distribution windows are also evolving, potentially affecting revenues from other windows. If WBD cannot ensure that its distribution methods and content are responsive to its target audiences, its business, financial condition and results of operations could be materially adversely affected. The WarnerMedia Business has, and WBD could, incur significant restructuring costs related to DTC products due to the rapidly and continuously-evolving DTC environment, in which consumer satisfaction, scale, differentiation and capacity to invest in content are crucial to streaming success.

The COVID-19 pandemic appears to have accelerated some existing trends. The lockdowns, for example, have encouraged households to experiment with digital offerings including subscription video-on-demand or to stack subscriptions—a trend which is expected to continue in the coming years.

If WBD’s DTC products fail to attract and retain subscribers, WBD’s business, financial condition and results of operations may be adversely impacted.

In January 2021, Discovery launched an aggregated DTC product, discovery+, in the United States. In May 2020, the WarnerMedia Business launched HBO Max in the United States. In connection with the Transactions, WBD expects to develop and implement a go-to-market strategy for its DTC products that coordinates and/or combines its offering of discovery+ and HBO Max. There can be no assurance that consumers and advertisers will embrace discovery+ and HBO Max or that subscribers will activate or renew a subscription.

The discovery+ and HBO Max offerings are subscription-based streaming products and will be among many such services in a crowded and competitive landscape. Their success will also be largely dependent on WBD’s ability to initially attract, and ultimately retain, subscribers. Competitors to discovery+ and HBO Max include traditional linear programming networks, including Discovery’s linear channels and the WarnerMedia Business’s linear channels, competing subscription video-on-demand services, and other digital entertainment platforms and offerings all vying for consumer time, attention and discretionary spending. If WBD is unable to effectively market its DTC products or if consumers do not perceive the pricing and related features of its DTC products to be of value versus competitors, WBD may not be able to attract and retain subscribers. In particular, decreases in consumer discretionary spending where WBD’s DTC products are offered may reduce WBD’s ability to attract and retain subscribers for its premium tier services, which could have a negative impact on WBD’s business, financial condition and results of operations. Relatedly, a decrease in viewing subscribers on WBD’s advertising-supported DTC products could also have a negative impact on the rates it is able to charge advertisers for advertising-supported services. The ability to attract and retain subscribers will also depend in part on WBD’s ability to provide compelling content choices that are differentiated from that of its competitors and that are more attractive than other sources of entertainment that consumers could choose in their free time. Furthermore, the ability to provide a quality subscriber experience and the relative service levels, may also impact WBD’s ability

to attract and retain subscribers. The inability to meet consumer demands and expectations in today’s highly competitive mobile, multi-screen and multi-platform environment for video delivery may affect the attractiveness of WBD’s DTC products. Ineffective technology and product integration, lack of specific features and functionalities, poor interface design or ease of use, or platform performance issues, among other factors, may cause viewers to favor alternative offerings. If WBD is unable to attract and retain subscribers to its DTC products, WBD’s business, financial condition and results of operations could be materially adversely affected.

Consolidation among pay-TV programming and satellite providers, both domestically and internationally, could have an adverse effect on WBD’s business, financial condition and results of operations.

Consolidation among pay-TV programming and satellite operators has given the largest operators considerable leverage in their relationships with programmers, including Discovery and the WarnerMedia Business. A significant portion of Discovery’s U.S. linear distribution revenues come from the top ten distributors. Discovery currently has agreements in place with the major pay-TV programming and satellite operators of U.S. and international television networks and digital content services which expire at various times through 2025. Some of Discovery’s largest distributors have combined, and as a result, have gained, or may gain, market power, which could affect WBD’s ability to maximize the value of its content through those platforms. In addition, many of the countries and territories in which WBD will distribute the Discovery and the WarnerMedia Business networks also have a small number of dominant distributors. Continued consolidation within the industry could reduce the number of distributors to carry WBD’s programming, subject its affiliate fee revenue to greater volume discounts, and further increase the negotiating leverage of the pay-TV programming and satellite television system operators which could have a material adverse effect on WBD’s business, financial condition and results of operations.

Failure to renew, renewal with less favorable terms, or termination of Discovery’s or the WarnerMedia Business’s distribution agreements may cause a decline in WBD’s revenue.

Because Discovery’s and the WarnerMedia Business’s pay-TV networks are licensed on a wholesale basis to distributors, such as cable and satellite operators, which in turn distribute them to consumers, WBD will be dependent upon the maintenance of distribution agreements with these operators. These distribution agreements generally provide for the level of carriage WBD’s networks will receive (e.g., provisions requiring minimum penetration and/or programming packaging requirements (widely distributed, broader programming packages compared to lesser distributed, specialized programming packages)) and for payment of a license fee to WBD based on the number of subscribers that receive its networks or other factors.

While the number of subscribers associated with WBD’s networks may impact its ability to generate advertising revenue, subscription-based revenue will represent a significant portion of its revenue. The distribution agreements generally have a limited term which may vary by territory and distributor, and there can be no assurance that these distribution agreements will be renewed in the future or that they will be renewed on terms that are favorable to WBD. A reduction in the license fees that WBD will receive or in the number of subscribers for which it is paid, including as a result of a loss or reduction in carriage for its networks or a reduction in distributor penetration, including as a result of the changes in consumer habits discussed in “—If WBD’s DTC products fail to attract and retain subscribers, WBD’s business, financial condition and results of operations may be adversely impacted” above, could materially adversely affect its distribution revenue. Such a loss or reduction in carriage could also decrease the potential audience for WBD’s programs, thereby materially adversely affecting its advertising revenue. In addition, the distribution agreements are complex and individually negotiated. If WBD were to disagree with one of the counterparties on the interpretation of a distribution agreement, WBD’s relationship with that counterparty could be damaged and its business, financial condition and result of operations could be negatively affected.

Failure to renew, renewal with less favorable terms, or termination of the WarnerMedia Business’s content licenses and similar distribution agreements may cause a decline in WBD’s revenue.

Because the WarnerMedia Business’s content is licensed to and distributed through third parties, such as theatrical exhibitors (and in certain international territories, local theatrical distributors), traditional television and pay-TV broadcasters and operators of digital platforms, which in turn make such content available, directly and indirectly, to consumers, WBD will be dependent upon the maintenance of such licensing and distribution agreements with such third parties. These agreements generally provide for the scope of licensed rights, including geographic territory, exploitation rights, holdbacks and/or other restrictions, including exclusivity or non-exclusivity, window(s) of exploitation (including first and second pay-TV and free to air broadcast), and for payment of a license fee to WBD based on a number of factors, including the scope of the rights granted, the popularity of the content (as measured in the case of films, for example, by box office performance for certain downstream exploitation) and the date of its first theatrical or pay-TV exhibition.

The license and distribution agreements generally have a limited term which may vary by territory and counterparty, and there can be no assurance that these agreements will be renewed in the future or that they will be renewed on terms that are favorable to WBD. The license fees and other commercial terms that WBD will receive are dependent, among other factors, on the acceptance and performance of its content with consumers. See “—The success of WBD’s business will depend on the acceptance of WBD’s entertainment, sports and news content by its U.S. and foreign viewers, which may be unpredictable and volatile.” A reduction in such license fees that licensees are willing to pay could materially affect its content revenue. Changes in distribution strategy and variations on traditional theatrical distribution and other licensing models, such as shortening traditional windows or making simultaneous the availability of certain films theatrically and on-demand, and other hybrids, may also drive changes in the licensee fees that theatrical exhibitors and distributors and other downstream licensees in the value chain may be willing to pay for content, which may in turn negatively affect WBD’s content revenue. In addition, content distribution and license agreements are complex and individually negotiated. If WBD were to disagree with one of the counterparties on the interpretation of a content distribution and license agreement, WBD’s relationship with that counterparty could be damaged and its business, financial condition and result of operations could be negatively affected.

Interpretation of some terms of Discovery’s and the WarnerMedia Business’s distribution agreements may have an adverse effect on the distribution payments WBD will receive under those agreements.

Some of Discovery’s and the WarnerMedia Business’s distribution agreements contain “most favored nation” clauses. These clauses typically provide that if they enter into an agreement with another distributor which contains certain more favorable terms, they must offer some of those terms to their existing distributors. Discovery and the WarnerMedia Business have entered into a number of distribution agreements with terms that differ in some respects from those contained in other agreements. While Discovery and the WarnerMedia Business believe that they have complied with the most favored nation clauses included in their distribution agreements, if distributors with these provisions were to assert or claim that Discovery or the WarnerMedia Business is not in compliance, and if they were to prevail, it could have a material adverse effect on WBD’s business, financial condition and results of operations.

Attracting, developing, motivating and retaining talented employees will be essential to the successful delivery of WBD’s products and services and success in the marketplace. The ability to attract and retain talented employees is critical in the development and delivery of products and services, which is an integral component of Discovery’s growth strategy for WBD. Competition for employees can be intense and if WBD is unable to successfully integrate, motivate and reward the current employees from the WarnerMedia Business or Discovery’s current employees in WBD, WBD may not be able to retain them. If WBD is unable to retain these

employees or attract new employees in the future, its ability to effectively compete with its competitors and to grow its business could be materially adversely affected.

In addition, Discovery and the WarnerMedia Business employ or contract with talent who may have loyal audiences. These individuals are important to audience endorsement of Discovery’s and the WarnerMedia Business’s programs and other content. There can be no assurance that these individuals will remain with WBD or retain their current audiences. If WBD fails to retain or attract key individuals or if its talent loses their current audience base, WBD’s business, financial condition and results of operations could be materially adversely affected.

The COVID-19 pandemic has negatively impacted the global economy and created significant volatility and disruption in the credit and financial markets, and while some economic disruption may ease from time to time, such disruption is expected to continue and may worsen for an undetermined period of time. There is a significant degree of uncertainty and lack of visibility as to the extent and duration of the global economic disruption caused by COVID-19; however, a prolonged disruption, slowdown or recession could materially adversely affect the market price of WBD common stock and WBD’s credit ratings, ability to access capital on favorable terms and ability to meet its liquidity needs and could have a material adverse effect on WBD’s business, financial condition and results of operations.

Discovery and the WarnerMedia Business, as with other businesses globally, have been significantly affected by the COVID-19 pandemic both domestically and internationally, including as a result of governmentally imposed shutdowns, workforce realignments, labor and supply chain interruptions, and quarantines and travel restrictions, among other factors. Certain key sources of revenue for the WarnerMedia Business, including theatrical revenues, television production, studio operations and themed entertainment, have been adversely impacted by governmentally imposed shutdowns and related labor interruptions and constraints on consumer activity, particularly in the context of public entertainment venues, such as cinemas and theme parks. Shutdowns and/or restrictions relating to television and theatrical production activity have impacted, and may continue to impact, various aspects of project scheduling, completion and budgets, as well as revenue streams tied to projected release or availability dates. All such impacts may continue for an indefinite length of time.

WBD’s actions to limit the adverse effects of COVID-19 on its financial condition may not be successful, as the extent and duration of the adverse effects of the pandemic is not determinable and depends on future developments, which are highly uncertain and cannot be predicted. Events resulting from the effects of COVID-19 may negatively impact WBD’s ability to comply with its financial covenants. Also, additional funding may not be available to WBD on acceptable terms or at all. If adequate funding is not available, WBD may be required to reduce expenditures, including curtailing its growth strategies and reducing its product development efforts, or forego acquisition opportunities.

WBD will face cybersecurity and similar risks, which could result in the disclosure of confidential and personal information, disruption of its programming services, damage to its brands and reputation, legal exposure and financial losses.

Discovery and the WarnerMedia Business rely on various technology systems in connection with the production, distribution and broadcast of their programming, and their on-line, mobile and app offerings, as well as their internal systems, including the storage and transmission of personal and proprietary information. From time to time, hackers and other malicious actors target Discovery, the WarnerMedia Business and their respective service providers, and certain systems have been, and may continue to be, breached due to employee error,

malicious code, hacking and phishing attacks, or otherwise. If Discovery’s or the WarnerMedia Business’s information security systems or data are compromised in a material way, such compromises could result in a disruption of services or a reduction of the revenues Discovery or the WarnerMedia Business are able to generate from such services, damage to Discovery’s and the WarnerMedia Business’s respective brands and reputation, a loss of confidence in the security of their offerings and services, and significant legal and financial exposure, each of which could potentially have a material adverse effect on WBD’s business. Additionally, outside parties may attempt to fraudulently induce employees or users to disclose sensitive or confidential information in order to gain access to data and systems. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not recognized until launched against a target, WBD may be unable to anticipate these techniques or to implement adequate preventative measures, notwithstanding any ongoing efforts to develop and implement robust data security tools, practices, and protocols. Accordingly, unauthorized access, modification and exfiltration of data cannot be eliminated entirely, and the risks associated with a potentially material incident remain. WBD may not have adequate insurance coverage to compensate itself or affected third parties for losses associated with cybersecurity and privacy events.

In addition, WBD will face regulatory risk associated with the acquisition, storage, disclosure, use and protection of personal data, including under the EU’s General Data Protection Regulation (“GDPR”), the California Consumer Privacy Act (“CCPA”), the California Privacy Rights Act (“CPRA”) and various other domestic and international privacy and data security laws and regulations, which are continually evolving. These evolving data protection laws may require WBD to expend significant resources to implement additional data protection measures, and its actual or alleged failure to comply with such laws could result in legal claims, regulatory enforcement actions and significant fines and penalties.

Service disruptions or the failure of communications satellites or transmitter facilities relied upon by WBD could adversely impact WBD’s business, financial condition and results of operations.

The WarnerMedia Business relies on communications satellites and transmitter facilities and other technical infrastructure, including fiber, to transmit their programming to affiliates and other distributors. Shutdowns of communications satellites and transmitter facilities or service disruptions pose significant risks to the WarnerMedia Business’s operations and will pose significant risks to WBD’s operations. Such disruptions may be caused by power outages, natural disasters, extreme weather, terrorist attacks, failures or impairments of communications satellites or on-ground uplinks or downlinks or other technical facilities and services used to transmit programming, failure of service providers to meet contractual requirements, or other similar events. For example, a large provider of satellite services to the WarnerMedia Business is currently subject to bankruptcy proceedings, which could affect its ability to meet its obligations under its contract. If a communications satellite or other transmission means (e.g., fiber) is not able to transmit WBD’s programming, or if any material component thereof fails or becomes inoperable, WBD may not be able to secure an alternative communications path in a timely manner because, among other factors, there are a limited number of communications satellites and other means available for the transmission of programming, and any alternatives may require lead time and additional technical resources and infrastructure to implement. If such an event were to occur, there could be a disruption in the delivery of WBD’s programming, which could harm WBD’s reputation and materially adversely affect WBD’s business, financial condition and results of operations.

Changes in domestic and foreign laws and regulations and other risks related to international operations could adversely impact WBD’s business, financial condition and results of operations.

Programming services like Discovery and the WarnerMedia Business, and the distributors of their services, including cable operators, satellite operators and other multi-channel video programming distributors, are regulated by U.S. federal laws and regulations issued and administered by various federal agencies, including the Federal Communications Commission (the “FCC”), as well as by state and local governments, in ways that will affect the daily conduct of WBD’s video content business. These obligations and regulations, among other things, require closed captioning of programming for the hearing impaired, require certain content providers to

make available audio descriptions of programming for the visually impaired, limit the amount and content of commercial matter that may be shown during programming aimed primarily at an audience of children aged 12 and under, and require the identification of (or the maintenance of lists of) sponsors of political advertising. The U.S. Congress, the FCC and the courts currently have under consideration, and may adopt or interpret in the future, new laws, regulations and policies regarding a wide variety of matters that could, directly or indirectly, affect the operations of WBD’s U.S. media properties or modify the terms under which it offers its services and operates.

Similarly, the foreign jurisdictions in which Discovery and the WarnerMedia Business networks are offered have, in varying degrees, laws and regulations that will govern WBD’s business. Discovery and the WarnerMedia Business have operations through which they offer for sale and distribute programming and other goods and services outside of the United States. As a result, WBD’s business will be subject to certain risks inherent in international business, many of which are beyond its control. These risks include:

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laws and policies affecting trade and taxes, including laws and policies relating to the repatriation of funds and withholding taxes, and changes in these laws;

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local regulatory requirements (and any changes to such requirements), including restrictions on content, censorship, imposition of local content quotas, local production levies and restrictions on foreign ownership, outsourcing, consumer protection, intellectual property and related rights, including copyright and rightsholder rights and remuneration;

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its ability to obtain the appropriate licenses and other regulatory approvals it needs to broadcast content in foreign countries;

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differing degrees of protection for intellectual property and varying attitudes towards the piracy of intellectual property;

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significant fluctuations in foreign currency value;

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currency exchange and central banking controls;

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the instability of foreign economies and governments;

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war and acts of terrorism;

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anti-corruption and sanction laws and regulations such as the Foreign Corrupt Practices Act, the U.K. Bribery Act, and programs administered by the Office of Foreign Assets Control, that impose stringent requirements on how WBD conducts its foreign operations and changes in these laws and regulations;

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foreign privacy and data protection laws and regulations and changes in these laws; and

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shifting consumer preferences regarding the viewing of video programming.

Events or developments related to these and other risks associated with international trade could adversely affect WBD’s revenues from non-U.S. sources, which could have a material adverse effect on its business, financial condition and results of operations. Acts of terrorism, hostilities, or financial, political, economic or other uncertainties could lead to a reduction in revenue or loss of investment, which could materially adversely affect its results of operations. Furthermore, some foreign markets where Discovery, the WarnerMedia Business and their respective partners operate may be more adversely affected by current economic conditions than the United States. WBD also may incur substantial expense as a result of changes, including the imposition of new restrictions, in the existing regulatory, economic or political environment in the regions where Discovery and the WarnerMedia Business do business. This is of particular concern in Poland, where Discovery operates TVN, a key component of Discovery’s international business, and where the government previously considered, and may reconsider or adopt in the future, regulations that would prohibit non-EU ownership of Polish licensed free-to-air and pay-TV channels. If such regulations are ever adopted, it could impact the ownership structure and licensing of TVN, and could, directly or indirectly, affect the operations of WBD’s Polish media properties and/or modify the terms under which WBD offers its services and operates in that market. The evolving regulatory environment

in international markets may also impact strategy, costs and results of operations, including with respect to local programming investment obligations, satisfaction of local content quotas, access to local production incentive schemes, such as film subsidies, and direct and indirect digital taxes or levies on internet-based programming services.

Global economic conditions may have an adverse effect on WBD’s business, financial condition and results of operations.

WBD’s business will be significantly affected by prevailing economic conditions, including inflation and fluctuations in interest rates, and by disruptions to financial markets. WBD will derive substantial revenues from advertisers, and these expenditures are sensitive to general economic conditions and consumer buying patterns. Financial instability or a general decline in economic conditions in the United States and other countries where WBD’s advertising-supported networks are distributed could materially adversely affect advertising rates and volume, resulting in a decrease in its advertising revenues.

Decreases in consumer discretionary spending in the United States and other countries where WBD’s networks are distributed may affect cable television and other video service subscriptions, in particular with respect to digital service tiers on which certain of WBD’s programming networks will be carried. This could lead to a decrease in the number of subscribers receiving WBD’s programming from multi-channel video programming distributors, which could have a negative impact on its viewing subscribers and distribution revenues. Similarly, a decrease in viewing subscribers would also have a negative impact on the number of viewers actually watching the programs on WBD’s programming networks/platforms, which could also impact the rates it is able to charge advertisers for advertising-supported services.

Economic conditions will affect a number of aspects of WBD’s businesses worldwide and impact the businesses of WBD’s partners who purchase advertising on its advertising-supported networks and might reduce their spending on advertising. Economic conditions could also negatively affect the ability of those with whom WBD does business to satisfy their obligations to WBD. The general worsening of current global economic conditions could materially adversely affect WBD’s business, financial condition and results of operations, and the worsening of economic conditions in certain parts of the world, specifically, could impact the expansion and success of its businesses in such areas.

The success of Discovery’s and the WarnerMedia Business’s businesses depend in part on their ability to maintain and enforce the intellectual property rights underlying their respective entertainment content. Discovery and the WarnerMedia Business are fundamentally content companies, and piracy of their content (including digital content), television networks, brands, and other intellectual property has the potential to materially adversely affect WBD. Piracy is particularly prevalent in parts of the world that do not effectively enforce intellectual property rights and laws, in contrast to territories such as the United States and much of Europe, and the Oceania territories. Even in territories like the United States, legal frameworks that are unresponsive to modern realities, combined with the lack of effective technological prevention and enforcement measures, may impede WBD’s enforcement efforts. WBD’s enforcement activities depend in part on third parties, including technology and platform providers, whose cooperation and effectiveness cannot be assured to any degree. In addition, technological advances that allow the almost instantaneous unauthorized copying and downloading of content into digital formats without any degradation of quality from the original facilitate the rapid creation, transmission and sharing of high-quality unauthorized copies. Unauthorized distribution of copyrighted material over the internet is a threat to copyright owners’ ability to maintain the exclusive control over their copyrighted material and thus the value of their property. The proliferation of unauthorized use of Discovery’s and the WarnerMedia Business’s respective content may have a material adverse effect on WBD’s business and

profitability because it may reduce the revenue that WBD potentially could receive from the legitimate sale and distribution of such content. WBD may need to spend significant amounts of money on improvement of technological platform security and enforcement activities, including litigation, to protect Discovery’s and the WarnerMedia Business’s intellectual property rights. Any impairment of Discovery’s and the WarnerMedia Business’s intellectual property rights, including due to changes in U.S. or foreign intellectual property laws or the absence of effective legal protections or enforcement measures, could materially adversely impact WBD’s business, financial condition and results of operations.

WBD’s business, financial condition and results of operations may be negatively impacted by the outcome of uncertainties related to litigation.

From time to time, WBD may be involved in a number of legal claims, regulatory investigations, litigation (asserted individually and/or on behalf of a class), and arbitration. WBD may be subject to a number of lawsuits both in the United States and in foreign countries, including, at any particular time, claims relating to antitrust, intellectual property, employment, wage and hour, consumer privacy, regulatory and tax proceedings, contractual and commercial disputes, and the production, distribution, and licensing of WBD content. WBD may also spend substantial resources complying with various government standards, which may entail related investigations and litigation. WBD may incur significant expenses defending such suits or government charges and may be required to pay amounts or otherwise change its operations in ways that could materially adversely affect its business, financial condition and results of operations. This could result in an increase in WBD’s cost for defense or settlement of claims or indemnification obligations if WBD were to be found liable in excess of Discovery’s or the WarnerMedia Business’s historical experience. Even if WBD believes a claim is without merit, or ultimately prevails, defending against the claim could be time-consuming and costly and divert its management’s attention and resources away from its business.

In addition, WBD’s insurance may not be adequate to protect it from all material expenses related to pending and future claims and Discovery’s and the WarnerMedia Business’s current levels of insurance may not be available in the future at commercially reasonable prices. Any of these factors could materially adversely affect WBD’s business, financial condition and results of operations.

WBD’s participation in multiemployer defined benefit pension plans could subject WBD to liabilities that could adversely affect WBD’s business, financial condition and results of operations.

The WarnerMedia Business contributes to various multiemployer defined benefit pension plans (the “multiemployer plans”) under the terms of collective bargaining agreements that cover certain of its union-represented employees. Upon the completion of the Transactions, WBD will assume certain of the obligations under these multiemployer plans with respect to transferred employees from the WarnerMedia Business. The risks of participation in these multiemployer plans are different from single-employer pension plans in that: (1) contributions made by WBD to the multiemployer plans may be used to provide benefits to employees of other participating employers; (2) if WBD chooses to stop participating in certain of these multiemployer plans, WBD may be required to pay those plans an amount based on the underfunded status of the plan, which is referred to as a withdrawal liability; and (3) actions taken by a participating employer that lead to a deterioration of the financial health of a multiemployer plan may result in the unfunded obligations of the multiemployer plan being borne by its remaining participating employers, including WBD. While WBD does not expect any of the multiemployer plans to which it will contribute to be individually significant to WBD, as of September 2021, the WarnerMedia Business was, and WBD could be, an employer that provides more than 5% of total contributions to certain of the multiemployer plans in which it participates or WBD will participate.

To the extent that U.S.-registered multiemployer plans are underfunded, the Employee Retirement Income Security Act of 1974, as amended by the Multiemployer Pension Plan Amendments Act of 1980 (collectively, “ERISA”), may subject WBD to substantial liabilities in the event of a complete or partial withdrawal from, or upon termination of, such plans. The WarnerMedia Business currently contributes to, and in the past has

contributed to, multiemployer plans that are underfunded, and, therefore, could have potential liability associated with a voluntary or involuntary withdrawal from, or termination of, such plans. In addition, for a multiemployer plan in endangered, seriously endangered or critical status, additional required contributions, generally in the form of surcharges on contributions otherwise required, and benefit reductions may apply if such plan is determined to be underfunded, which could adversely affect WBD’s business, financial condition and results of operations if WBD is unable to adequately mitigate these costs.

As of December 31, 2020, two of the multiemployer plans in which the WarnerMedia Business participates were underfunded, but neither plan was considered to be in endangered, seriously endangered or critical status. The amount of funds WBD may be obligated to contribute to multiemployer plans in the future cannot be estimated, as these amounts are based on future levels of work of the union-represented employees covered by the multiemployer plans, investment returns and the funding status of such plans. The WarnerMedia Business does not currently intend to withdraw from the multiemployer plans in which it participates, and it is not aware of circumstances that would reasonably lead to material claims against WBD in connection with the multiemployer plans in which WBD will participate. There can be no assurance, however, that WBD will not be assessed liabilities in the future. Potential withdrawal liabilities, requirements to pay increased contributions, and/or surcharges in connection with any multiemployer plans in which WBD will participate could materially adversely affect WBD’s business, financial condition and results of operations.

WBD’s businesses may be subject to labor disruption.

WBD and some of its suppliers and business partners will retain the services of writers, directors, actors, announcers, athletes, technicians, trade employees and others involved in the development and production of its television programming, feature films and interactive entertainment (e.g., games) who are covered by collective bargaining agreements. If negotiations to renew expiring collective bargaining agreements are not successful or become unproductive, the affected unions could take actions such as strikes, work slowdowns or work stoppages. Strikes, work slowdowns, work stoppages or the possibility of such actions could result in delays in the production of WBD’s television programming, feature films and interactive entertainment. WBD could also incur higher costs from such actions, enter into new collective bargaining agreements or renew collective bargaining agreements on less favorable terms. Many of the collective bargaining agreements that will cover individuals providing services to WBD are industry-wide agreements, and WBD may lack practical control over the negotiations and terms of these agreements. Union or labor disputes or player lock-outs relating to certain professional sports leagues may preclude WBD from producing and telecasting scheduled games or events and could negatively impact WBD’s promotional and marketing opportunities. Depending on their duration, union or labor disputes or player lock-outs could have a material adverse effect on WBD’s business, financial condition and results of operations.

As Discovery and the WarnerMedia Business both have operations in the United Kingdom, the United Kingdom’s withdrawal from the European Union could have an adverse impact on WBD’s business, financial condition and results of operations.

On January 31, 2020, the United Kingdom formally withdrew from the European Union, an event commonly referred to as “Brexit.” The transition period, during which the pre-Brexit rights and obligations on trade, travel and business for the United Kingdom and the European Union continued to apply, ended on December 31, 2020. As of January 1, 2021, the relationship between the United Kingdom and the European Union is governed by the EU-UK Trade and Cooperation Agreement (“TCA”).

As a result of Brexit, the single-market and country-of-origin principles which have facilitated Discovery’s and the WarnerMedia Business’s respective cross-border activities from the United Kingdom into the European Union have ceased, which could have a material adverse impact on WBD’s business, financial condition and results of operations. Discovery and the WarnerMedia Business have incurred, and may continue to incur, costs, including due to reestablishment of broadcasting entities from the United Kingdom into the European Union,

staff relocations and business travel, to minimize disruption to their businesses in the European Union, especially given that the audiovisual sector is carved out of the current trade deal between the United Kingdom and the European Union. There remains potential legal uncertainty and potentially divergent national laws and regulations as the United Kingdom determines which EU laws to replace and/or replicate as well as further changes the European Union may make regarding its audiovisual sector.

The announcement and implementation of Brexit has caused significant volatility in global stock markets and currency exchange rate fluctuations. With the expansion of WBD’s international operations, its exposure to currency exchange rate fluctuation will increase. The increase in exposure could have a material adverse effect on its results of operations and net asset balances, due, in part, to currency fluctuations impacting the British pound and the Euro. Brexit may also create global uncertainty, which may cause a decrease in consumer discretionary spending. Decreases in consumer discretionary spending may affect cable television and other video service subscriptions where Discovery’s and the WarnerMedia Business’s networks are distributed. A decrease in the number of subscribers receiving their programming could have a negative impact on WBD’s distribution revenues and the rates it will be able to charge for advertising for its advertising-supported services. In addition, different market requirements for advertising content may impact WBD’s advertising revenues. Any of the foregoing factors may materially adversely affect WBD’s business, financial condition and results of operations.

Foreign exchange rate fluctuations may adversely affect WBD’s business, financial condition and results of operations.

Discovery and the WarnerMedia Business have significant operations in a number of foreign jurisdictions and certain of their operations are, and certain of WBD’s operations will be, conducted—and certain of their debt obligations are, and certain of WBD’s debt obligations will be denominated—in foreign currencies. As a result, WBD will have exposure to foreign currency risk as it enters into transactions and makes investments denominated in multiple currencies. In addition, unforeseeable changes in foreign currency exchange rates could materially adversely affect WBD’s calculations of interest coverage and leverage ratios, which are used by independent rating agencies to assign short and long-term debt ratings. Lower debt ratings could increase WBD’s cost of borrowing or make it more difficult for it to obtain future financing, which could materially adversely affect WBD’s business, financial condition and results of operations.

The value of these currencies fluctuates relative to the U.S. dollar. WBD’s consolidated financial statements will be denominated in U.S. dollars, and to prepare those financial statements it will need to translate the amounts of the assets, liabilities, net sales, other revenues and expenses of its operations outside of the United States from local currencies into U.S. dollars using exchange rates for the current period. As WBD expands its international operations, its exposure to exchange rate fluctuations will increase. This increased exposure could have a material adverse effect on WBD’s business, financial condition and results of operations. There is no assurance that downward trending currencies will rebound or that stable currencies will remain unchanged in any period or for any specific market.

Increasing complexity of global tax policy and regulations could adversely impact WBD’s business and results of operations.

WBD will face the increasing complexity of operating a global business, as Discovery and the WarnerMedia Business are subject to tax policy and regulations in multiple non-U.S. jurisdictions. Many foreign jurisdictions are contemplating additional taxes and/or levies on over-the-top services, as well as media advertising, including the proposed levy on media companies under consideration by the Polish government. In addition, many foreign jurisdictions have increased scrutiny and have either changed, or plan to change, their international tax systems due to the Organisation for Economic Co-operation and Development’s (“OECD”) Base Erosion and Profit Shifting (“BEPS”) recommendations. The BEPS recommendations call for enhanced transparency and reporting relating to companies’ entity structures and transfer pricing policies. These have been implemented through various initiatives, including the requirement for taxpayers to comply with global country-by-country reporting

and the filing of a global master file, as well as the introduction of the multilateral instrument (“MLI”) which allows taxing authorities to better take aim at multinational tax avoidance. WBD will address and comply with these compliance and reporting requirements. Recently, officials from 136 jurisdictions, including the United States, agreed upon a framework for overhauling the taxation of multinational corporations that includes, among other things, profit reallocation rules and a 15% global minimum corporate income tax rate. These provisions, if implemented, could have a material effect on WBD’s income tax liability.

Additional complexity has also arisen in state aid: state resources used to provide recipients an advantage on a selective basis that has or could distort competition and affect trade between European member states. In recent years, the EC has increased their scrutiny on state aid and deviated from the historical EU state aid practices. There is great uncertainty about the future of EU state aid practices based on the appeals of many significant EC rulings against multinational corporations that are currently being challenged. The potential impact of these rulings is difficult to assess and Discovery’s and AT&T’s respective transfer pricing analyses conducted pursuant to accepted OECD methodologies may not sufficiently mitigate risk associated with Discovery’s and the WarnerMedia Business’s past agreements, respectively, or WBD’s agreements. Continued access, at historical levels, to production incentive schemes, such as film subsidies and tax credits, may also be affected by proposed changes in the laws currently under examination.

In addition, the determination of WBD’s worldwide provision for income taxes and current and deferred tax assets and liabilities will require judgment and estimation. WBD’s income taxes could also be materially adversely affected by earnings being lower than anticipated in jurisdictions that have lower statutory tax rates and higher than anticipated in jurisdictions that have higher statutory tax rates, by changes in the valuation of WBD’s deferred tax assets and liabilities, or by changes in worldwide tax laws, regulations or accounting principles.

In the United States, the Biden administration has issued guidance on certain tax law changes that it would support, which include, among other things, a significant increase in the corporate income tax rate, a new alternative minimum tax on book income and changes in the taxation of non-U.S. income. There has been recently released proposed legislation that includes, among other things, a new interest deduction limitation for certain domestic corporations that are members of certain multinational groups. While it is too early to predict the outcome of these proposals, if enacted, they could have a material effect on WBD’s income tax liability.

WBD expects to have directors in common with those of Liberty Media Corporation (“Liberty Media”), Liberty Global plc (“Liberty Global”), Qurate Retail, Inc. (“Qurate Retail”) and Liberty Broadband Corporation (“Liberty Broadband”), which may result in the diversion of business opportunities or other potential conflicts.

Liberty Media, Liberty Global, Qurate Retail and Liberty Broadband (collectively, the “Liberty Entities”) own interests in various U.S. and international companies, such as Charter Communications, Inc., that have subsidiaries that own or operate domestic or foreign content services that may compete with the content services WBD will offer. WBD will have no rights in respect of U.S. or international content opportunities developed by or presented to the subsidiaries of any Liberty Entities, and the pursuit of these opportunities by such subsidiaries may materially adversely affect WBD’s interests and those of its stockholders. Because WBD and the Liberty Entities expect to have overlapping directors, the pursuit of business opportunities may serve to intensify the conflicts of interest or appearance of conflicts of interest faced by the respective management teams.

WBD expects to have directors who are also related persons of Advance/Newhouse and who overlap with those of the Liberty Entities, which may lead to conflicting interests for those tasked with the fiduciary duties of the WBD Board.

The WBD Board is expected to include Steven A. Miron, the Chief Executive Officer of ANP, and Steven O. Newhouse, the Co-President of Advance. In addition, the WBD Board is expected to include John C. Malone,

who is currently chairman of the board of directors of each of Liberty Media, Liberty Global and Liberty Broadband and a member of the board of directors of Qurate Retail. Mr. Miron is also currently a member of the board of directors of Charter Communications, Inc., of which Liberty Broadband owns an equity interest. The parent company of Advance/Newhouse and the Liberty Entities own interests in a range of media, communications and entertainment businesses.

None of the Liberty Entities will own any interest in WBD. As of October 31, 2021, Dr. Malone beneficially owns: shares of Liberty Media representing approximately 49% of the aggregate voting power of its issued and outstanding stock, shares representing approximately 30% of the aggregate voting power of Liberty Global, shares representing approximately 6% of the aggregate voting power of Qurate Retail and shares representing approximately 47% of the aggregate voting power of Liberty Broadband. Following the completion of the Transactions, Dr. Malone will beneficially own shares representing approximately % of the aggregate voting power in WBD. Expected members of the WBD Board who are also directors of the Liberty Entities hold stock and stock-based compensation in the Liberty Entities and Discovery and will hold stock and stock-based compensation in WBD following the Transactions.

These ownership interests and/or business positions could create, or appear to create, potential conflicts of interest when these individuals are faced with decisions that could have different implications for WBD, Advance/Newhouse and/or the Liberty Entities. For example, there may be the potential for a conflict of interest when WBD, on the one hand, or Advance/Newhouse and/or one or more of the Liberty Entities, on the other hand, consider acquisitions and other corporate opportunities that may be suitable for the other.

The members of the WBD Board will have fiduciary duties to WBD and its stockholders. Likewise, those persons who serve in similar capacities at Advance/Newhouse or a Liberty Entity have fiduciary duties to those companies. Therefore, such persons may have conflicts of interest or the appearance of conflicts of interest with respect to matters involving or affecting both respective companies, and there can be no assurance that the terms of any transactions will be as favorable to WBD or its subsidiaries as would be the case in the absence of a conflict of interest.

Provisions in the WBD charter and the Discovery bylaws and of applicable law may prevent or delay an acquisition of WBD, which could decrease the market price of WBD common stock.

The WBD charter, the Discovery bylaws and the DGCL contain or will contain provisions that may have the effect of deterring takeovers of WBD by making such takeovers more expensive to the acquirer and by encouraging prospective acquirers to negotiate with the WBD Board rather than to attempt a hostile takeover. These provisions include: (1) the division of the WBD Board into three classes of directors with Class I directors initially serving until immediately following WBD’s first annual meeting of stockholders after the completion of the Merger, Class II directors initially serving until immediately following WBD’s second annual meeting of stockholders after the completion of the Merger and Class III directors initially serving until immediately following WBD’s third annual meeting of stockholders after the completion of the Merger, which could have the effect of making the replacement of incumbent directors more time-consuming and difficult; (2) the prohibition of stockholder action by written consent; (3) rules regarding how the WBD stockholders may present proposals or nominate directors for election at stockholder meetings; and (4) the right of the WBD Board to issue preferred stock without stockholder approval. The DGCL will also impose some restrictions on mergers and other business combinations between WBD and any holder of 15% or more of outstanding WBD common stock. For more information, see “Description of Capital Stock of Discovery and WBD—Certain Anti-Takeover Effects of the WBD Charter, the Discovery Bylaws and Delaware Law.”

These provisions are intended to protect WBD stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with the WBD Board and by providing the WBD Board with more time to assess any acquisition proposal. These provisions are not intended to make WBD immune from takeovers. However, these provisions apply even if the offer may be considered beneficial by some stockholders

and could delay or prevent an acquisition that the WBD Board determines is not in the best interests of WBD and its stockholders. Accordingly, if the WBD Board determines that a potential business combination transaction is not in the best interests of WBD and its stockholders, but certain stockholders believe that such a transaction would be beneficial to WBD and its stockholders, such stockholders may elect to sell their shares in WBD and the market price of WBD common stock could decrease.

These and other provisions of the WBD charter, the Discovery bylaws and the DGCL could have the effect of delaying, deferring or preventing a proxy contest, tender offer, merger or other change in control, which may have a material adverse effect on WBD’s business, financial condition and results of operations.

The WBD charter will designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by WBD stockholders, which could discourage lawsuits against WBD and its directors and officers.

The WBD charter will provide that unless WBD consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of WBD, (2) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, employee, stockholder or agent of WBD to WBD or its stockholders, (3) any action or proceeding asserting a claim arising out of or pursuant to, or seeking to enforce any right, obligation or remedy under, any provision of the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery (including, without limitation, any action asserting a claim arising out of or pursuant to the WBD charter or the bylaws of the combined company) or (4) any action or proceeding asserting a claim governed by the internal affairs doctrine.

Unless WBD consents in writing to the selection of an alternative forum, the federal district courts of the United States will, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, the Securities Exchange Act of 1934, as amended (“Exchange Act”), and the rules and regulations thereunder. Any person or entity acquiring any interest in shares of WBD common stock will be deemed to have notice of and consented to the exclusive forum provision in the WBD charter. Stockholders will not be deemed to have waived WBD’s compliance with the federal securities laws and the rules and regulations thereunder. The enforceability of similar exclusive forum provisions in other companies’ charters and bylaws has been challenged in legal proceedings, and it is possible that, in connection with claims arising under federal securities laws or otherwise, a court could find the exclusive forum provision in the WBD charter to be inapplicable or unenforceable.

This exclusive forum provision may limit the ability of stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with WBD or its directors or officers, which may discourage such lawsuits against WBD or its directors or officers. Alternatively, if a court were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings described above, WBD may incur additional costs associated with resolving such matters in other jurisdictions or forums, which could materially adversely affect WBD’s business, financial condition and results of operations.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements included in or incorporated by reference into this proxy statement/prospectus that are not historical facts, including financial estimates and projections and statements as to the expected timing, completion and effects of the Transactions, including expected synergies, constitute “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and the rules, regulations and releases of the SEC. These forward-looking statements are subject to risks and uncertainties, and actual results might differ materially from those discussed in, or implied by, the forward-looking statements. Such forward-looking statements include, but are not limited to, statements about the benefits of the Transactions, including future financial and operating results, WBD’s plans, objectives, expectations and intentions, and other statements that are not historical facts. Forward-looking statements are based on the current beliefs and expectations of the managements of Discovery, AT&T and the WarnerMedia Business and are subject to significant risks and uncertainties outside of their control. Words such as “believes,” “anticipates,” “estimates,” “expects,” “plans,” “intends,” “aims,” “potential,” “will,” “would,” “could,” “considered,” “likely,” “estimate” and variations of these words and similar future or conditional expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on future circumstances that may or may not occur. Actual results may differ materially from the current beliefs and expectations of the managements of Discovery, AT&T and the WarnerMedia Business depending on a number of factors affecting their businesses and risks associated with the successful execution of the Transactions and the integration and performance of WBD following the Transactions. In evaluating these forward-looking statements, you should carefully consider the risks described herein and in other reports that Discovery, AT&T and Spinco file with the SEC. See “Risk Factors” and “Where You Can Find More Information; Incorporation by Reference.” Factors which could have a material adverse effect on operations and future prospects or which could cause events or circumstances to differ from the forward-looking statements include, but are not limited to:

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the occurrence of any event, change or other circumstances that could give rise to the termination of, or prevent or delay the completion of, the Transactions;

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the risk that Discovery stockholders may not approve the Transactions;

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the risk that the necessary regulatory approvals may not be obtained or may be obtained subject to conditions that are not anticipated or that may be burdensome;

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the risk that the Transactions may not qualify for their intended tax treatment;

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risks that any of the closing conditions to the Transactions may not be satisfied in a timely manner;

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risks associated with third-party contracts containing consent and/or other provisions that may be triggered by the Transactions;

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risks related to disruption of management time from ongoing business operations due to the Transactions;

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risks related to Discovery’s ability to complete and WBD’s ability to integrate, maintain and obtain the anticipated financial and other benefits, including synergies, from the Transactions on a timely basis or at all;

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the possibility that the Transactions may involve other unexpected costs or liabilities;

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the risk that the integration of Discovery and the WarnerMedia Business will be more difficult, time-consuming or costly than expected;

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risks and costs related to the pursuit and/or implementation of the Separation, including the timing anticipated to complete the Separation and any changes to the configuration of businesses included in the Separation if implemented;

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risks related to any legal proceedings that have been or may be instituted against Discovery, AT&T and/or others relating to the Transactions;

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risks related to the value of WBD common stock to be issued in the Transactions and uncertainty as to the long-term value of WBD common stock and AT&T common stock;

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the effects of the announcement, pendency, completion or failure to achieve completion of the Transactions on Discovery’s, AT&T’s and the WarnerMedia Business’s operating results and businesses generally as well as the market price of AT&T common stock and Discovery capital stock;

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risks related to financial community and rating agency perceptions of each of Discovery and AT&T and their respective business, operations, financial condition and the industry in which each operates;

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the risk that Spinco, as a newly formed entity that currently has no credit rating, will not have access to the capital markets on acceptable terms;

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the effects of the announcement, pendency, completion or failure to achieve completion of the Transactions on the ability of Discovery, AT&T or the WarnerMedia Business to retain customers and retain and hire key personnel and maintain relationships with their suppliers;

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inherent uncertainties involved in the estimates and judgments used in the preparation of financial statements and the providing of estimates of financial measures, in accordance with GAAP and related standards, or on an adjusted or pro forma basis;

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inherent uncertainties involved in the estimates and assumptions used in the preparation of financial projections;

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future levels of indebtedness, including significant indebtedness expected to be incurred in connection with the Transactions, future compliance with debt covenants and the degree to which WBD will be leveraged following the completion of the Transactions;

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failure to timely obtain or consummate the financing or refinancing required in connection with the Transactions upon acceptable terms or at all;

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changes in the distribution and viewing of television programming, including the expanded deployment of personal video recorders, subscription video-on-demand, internet protocol television, mobile personal devices, personal tablets and user-generated content and their impact on television advertising revenue;

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continued consolidation of distribution customers and production studios;

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a failure to secure distribution agreements or renewal of such agreements on less favorable terms;

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rapid technological changes;

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the inability of advertisers or affiliates to remit payment to Discovery or the WarnerMedia Business in a timely manner or at all;

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risks related to the potential impact of general economic, political and market factors on the companies or the Transactions;

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industry trends, including the timing of, and spending on, feature film, television and television commercial production;

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spending on domestic and foreign television advertising;

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disagreements with Discovery’s or the WarnerMedia Business’s distributors or other business partners over contract interpretation;

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fluctuations in foreign currency exchange rates and political unrest and regulatory changes in international markets, including any proposed or adopted regulatory changes that impact the operations of Discovery’s or the WarnerMedia Business’s international media properties and/or modify the terms under which they offer their services and operate in international markets;

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market demand for foreign first-run and existing content libraries;

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the regulatory and competitive environment of the industries in which Discovery and the WarnerMedia Business, and the entities in which Discovery has interests, operate;

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uncertainties associated with product and service development and market acceptance, including the development and provision of programming for new television and telecommunications technologies and coordinating the offering of discovery+ and HBO Max;

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realizing DTC subscriber goals;

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future financial performance, including availability, terms and deployment of capital;

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the ability of suppliers and vendors to deliver products, equipment, software and services;

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the outcome of any pending, threatened or potential litigation;

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availability of qualified personnel and recruiting, motivating and retaining talent;

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the possibility or duration of an industry-wide strike or other job action affecting a major entertainment industry union or others involved in the development and production of WBD’s television programming, feature films and interactive entertainment (e.g., games) who are covered by collective bargaining agreements;

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changes in, or failure or inability to comply with, government regulations, including, without limitation, regulations of the FCC and similar authorities internationally and adverse outcomes from regulatory proceedings;

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changes in income taxes due to regulatory changes or changes in Discovery’s or WBD’s corporate structure;

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the parties’ ability to meet expectations regarding the timing, completion and accounting and tax treatment of the Transactions;

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changes in the nature of key strategic relationships with partners, distributors and equity method investee partners;

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competitor responses to WBD’s products and services and the products and services of the entities in which WBD will have interests;

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threatened or actual cyberattacks and cybersecurity breaches;

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threatened terrorist attacks and military action;

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the risk that natural disasters, public health issues, epidemics and pandemics, including COVID-19 and its variants, or the fear of such events, could provoke responses that cause delays in the expected timing of the Transactions, including, without limitation, as a result of any government or company imposed travel restrictions or the closure of government offices and resulting delays with respect to any matters pending before such governmental authorities;

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the severity, magnitude and duration of the COVID-19 pandemic and containment, mitigation and other measures taken in response, including the potential impacts of these matters on WBD’s business, financial condition and results of operations;

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the inability to predict the extent to which the COVID-19 pandemic and related impacts will continue to impact WBD’s business, financial condition and results of operations;

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reduced access to capital markets or significant increases in costs to borrow, including as a result of higher interest rates and perceived, potential or actual inflation;

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service disruptions or the failure of communications satellites or transmitter facilities;

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potential changes to the electromagnetic spectrum currently used for broadcast television and satellite distribution being considered by the FCC could negatively impact the WarnerMedia Business’s ability to deliver pay-TV network feeds of its domestic pay-TV programming networks to its affiliates, and, in some cases, the WarnerMedia Business’s ability to produce high-value news and entertainment programming on location;

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theft of Discovery’s or the WarnerMedia Business’s content and unauthorized duplication, distribution and exhibition of such content;

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changes in existing U.S. and foreign laws and regulations, as well as possible private rights of action, regarding intellectual property rights protection and privacy, personal data protection and user consent;

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a reduction of advertising revenue associated with unexpected reductions in the number of viewers; and

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other risks detailed from time to time in the respective filings of Discovery and AT&T with the SEC, including Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.

Unlisted factors, risks and uncertainties may present significant additional obstacles to the realization of forward-looking statements. The information contained herein speaks as of the date hereof, Discovery, AT&T and Spinco expressly disclaim any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.

INFORMATION ABOUT THE DISCOVERY SPECIAL MEETING

Date, Time and Place

Purpose of the Discovery Special Meeting

At the Discovery special meeting, Discovery stockholders will be asked to consider and vote on the Charter Amendment proposals, the Share Issuance proposal and the “Golden Parachute” Compensation proposal. See “—Charter Amendment, Share Issuance and ‘Golden Parachute’ Compensation Proposals.”

Recommendation of the Discovery Board

In addition, the Discovery Board unanimously recommended that Discovery stockholders vote “FOR” the “Golden Parachute” Compensation proposal.

Discovery Record Date; Stockholders Entitled to Vote

Quorum

A quorum is necessary to transact business at the Discovery special meeting. For the purposes of the Discovery special meeting, the presence, in person or by properly executed proxy, of the holders of a majority in voting power of (1) the outstanding shares of Discovery Series B common stock, voting as a class, (2) the outstanding shares of Discovery Series A-1 preferred stock, voting as a class, (3) the outstanding shares of Discovery Series C-1 preferred stock, voting as a class, and (4) the outstanding shares of Discovery voting stock, voting together as a single class, will constitute a quorum. Discovery stockholders present virtually during the Discovery special meeting will be considered present in person at the Discovery special meeting. If a quorum is not present, the Discovery special meeting will be adjourned until a quorum is obtained.

Required Vote

Failure to Vote and Abstentions

If you are a holder of shares of Discovery capital stock entitled to vote at the Discovery special meeting and you do not attend the Discovery special meeting in person or return a proxy, or if you hold your shares in “street name” through a bank, brokerage firm or other nominee and you do not provide voting instructions to your brokerage firm, your shares will not be voted and will not be treated as present for purposes of establishing a quorum. This will have the effect of a vote “AGAINST” the Charter Amendment proposals for purposes of the separate class votes by the Discovery Series B common stock, the Discovery Series A-1 preferred stock and the Discovery Series C-1 preferred stock, and, assuming a quorum is present at the Discovery special meeting, will have no effect on the Charter Amendment proposals, the Share Issuance proposal or the “Golden Parachute” Compensation proposal when the Discovery voting stock votes together as a single class.

Voting at the Discovery Special Meeting

In order to vote online at the Discovery special meeting, you will need the control number on your proxy card or voting instruction card. Instructions on how to attend and participate online at the Discovery special meeting are posted at . If you are a Discovery stockholder as of the Discovery record date, you should enter your control number and follow the prompt to log in. You will not be allowed to record the Discovery special meeting.

Voting by Proxy

A proxy card is enclosed for your use. Discovery requests that you mark, sign and date the accompanying proxy and return it promptly in the enclosed postage-paid envelope. When the accompanying proxy is returned properly executed, the shares of Discovery capital stock entitled to vote at the Discovery special meeting represented by it will be voted at the Discovery special meeting or any adjournment or postponement thereof in accordance with the instructions contained in the proxy.

If a properly executed proxy is returned without an indication as to how the shares of Discovery capital stock entitled to vote at the Discovery special meeting represented are to be voted with regard to a particular proposal, the Discovery capital stock represented by the proxy will have the effect of voting “FOR” the Charter Amendment proposals, “FOR” the Share Issuance proposal or “FOR” the “Golden Parachute” Compensation proposal, as applicable. If you are a beneficial owner, your bank, brokerage firm or other nominee will vote your shares on the proposals only if you return a properly executed proxy with an indication as to how the shares of Discovery capital stock entitled to vote represented are to be voted with regard to a particular proposal.

At the date hereof, Discovery management has no knowledge of any business that will be presented for consideration at the Discovery special meeting and which would be required to be set forth in this proxy statement/prospectus or the related proxy card other than the matters set forth in the notice of the Discovery special meeting. If any other matter is properly presented at the Discovery special meeting for consideration, it is intended that the persons named in the enclosed form of proxy and acting thereunder will vote in accordance with their best judgment on such matter.

YOUR VOTE IS IMPORTANT. ACCORDINGLY, PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WHETHER OR NOT YOU PLAN TO ATTEND THE DISCOVERY SPECIAL MEETING.

How Proxies Are Counted

All shares of Discovery capital stock entitled to vote at the Discovery special meeting and represented by properly executed proxies received in time for the Discovery special meeting will be voted at the Discovery special meeting in the manner specified by the Discovery stockholder giving those proxies. Properly executed proxies that do not contain voting instructions with respect to a particular proposal will be voted “FOR” the Charter Amendment proposals, “FOR” the Share Issuance proposal or “FOR” the “Golden Parachute” Compensation proposal, as applicable.

Shares Held in “Street Name”

If you hold shares of Discovery capital stock entitled to vote at the Discovery special meeting through a bank, brokerage firm or other nominee and wish to vote such shares of Discovery capital stock in person at the Discovery special meeting, you must follow the instructions provided by your bank, brokerage firm or nominee. Most brokerage firms offer the ability for Discovery stockholders to submit voting instructions by mail by completing a voting instruction card, by telephone and via the internet. If you do not provide voting instructions to your brokerage firm, your shares will not be voted and will not be treated as present for purposes of establishing a quorum. This will have the effect of a vote “AGAINST” the Charter Amendment proposals for purposes of the separate class votes by the Discovery Series B common stock, the Discovery Series A-1 preferred stock and the Discovery Series C-1 preferred stock, and, assuming a quorum is present, will have no effect on the Charter Amendment proposals, the Share Issuance proposal or the “Golden Parachute” Compensation proposal when the Discovery voting stock votes together as a single class.

Revocation of Proxies and Changes to a Discovery Stockholder’s Vote

If you are the holder of record of Discovery capital stock entitled to vote at the Discovery special meeting, you may change your vote at any time before your proxy is voted at the Discovery special meeting. You may do this in one of four ways:

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by sending a notice of revocation to Discovery, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 bearing a later date than your original proxy card and mailing it so that it is received prior to the Discovery special meeting;

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by sending a completed proxy card to Discovery, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 bearing a later date than your original proxy card and mailing it so that it is received prior to the Discovery special meeting;

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by logging on to the internet website specified on your proxy card in the same manner you would to submit your proxy electronically or by calling the telephone number specified on your proxy card, in each case if you are eligible to do so and following the instructions on the proxy card; or

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by attending the Discovery special meeting and voting in person, if you are entitled to do so.

Your attendance at the Discovery special meeting alone will not revoke any proxy.

Written notices of revocation and other communications about revoking proxies should be addressed to:

Discovery, Inc.

c/o Broadridge

51 Mercedes Way

Edgewood, NY 11717

If your shares of Discovery capital stock entitled to vote at the Discovery special meeting are held in “street name,” you should follow the instructions of your bank, brokerage firm or other nominee regarding the revocation of proxies.

Once voting on a particular matter is completed at the Discovery special meeting, a Discovery stockholder will not be able to revoke its proxy or change its vote as to that matter.

All shares of Discovery capital stock entitled to vote at the Discovery special meeting and represented by valid proxies that Discovery receives through this solicitation, and that are not revoked, will be voted in accordance with the instructions on the proxy card. If a Discovery stockholder makes no specifications on its proxy card as to how it wants its shares of Discovery capital stock entitled to vote at the Discovery special meeting voted before signing and returning it, such proxy will be voted “FOR” the Charter Amendment proposals, “FOR” the Share Issuance proposal or “FOR” the “Golden Parachute” Compensation proposal, as applicable.

Tabulation of Votes

The Discovery Board has appointed Broadridge Financial Solutions, Inc. (“Broadridge”) to serve as the inspector of election for the Discovery special meeting. The inspector of election will, among other matters, determine the number of shares of Discovery capital stock entitled to vote at the Discovery special meeting represented at the Discovery special meeting to confirm the existence of a quorum for each proposal, determine the validity of all proxies and ballots and certify the results of voting on the Charter Amendment proposals, the Share Issuance proposal and the “Golden Parachute” Compensation proposal submitted to the Discovery stockholders.

Solicitation of Proxies

Discovery will bear the entire cost of soliciting proxies from its stockholders. In addition to the solicitation of proxies by mail, Discovery will request that banks, brokerage firms and other holders of record send proxies and proxy material to the beneficial owners of Discovery capital stock entitled to vote at the Discovery special meeting and secure their voting instructions, if necessary. Discovery will reimburse the record holders for their reasonable expenses in taking those actions.

Discovery has also made arrangements with Innisfree to assist in soliciting proxies and in communicating with Discovery stockholders and has agreed that it will pay them a fee of approximately $30,000 per month plus certain fees and expenses for these services until the Discovery special meeting. Discovery will provide funds to Innisfree for the payment of charges rendered by banks, brokerage firms or their agents for forwarding proxy materials to beneficial owners of Discovery capital stock entitled to vote at the Discovery special meeting. If necessary, Discovery may also use several of its regular employees, who will not be specially compensated, to solicit proxies from Discovery stockholders, either personally or by telephone, the internet, facsimile or letter.

Householding

The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and annual report with respect to two or more stockholders sharing the same address by delivering a single proxy statement or annual report, as applicable, addressed to those stockholders. As permitted by the Exchange Act, only one copy of this proxy statement/prospectus is being delivered to Discovery stockholders residing at the same address, unless stockholders have notified Discovery of their desire to receive multiple copes of this proxy statement/prospectus. This process, which is commonly referred to as “householding,” potentially provides extra convenience for Discovery stockholders and cost savings for Discovery.

If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement/prospectus, or if you are receiving multiple copies of this proxy statement/prospectus and wish to receive only one, please contact Discovery Investor Relations at 230 Park Avenue South, New York, New York 10003 (telephone number: (212) 548-5555). Discovery will promptly deliver, upon oral or written request, a separate copy of this proxy statement/prospectus to any Discovery stockholder residing at an address to which only one copy was mailed.

Adjournments

If a quorum is not present or represented, the Discovery special meeting may be adjourned from time to time solely by the chairperson of the meeting until a quorum is present. If a quorum is present at the Discovery special meeting but there are not sufficient votes at the time of the meeting to approve the Charter Amendment proposals, the Share Issuance proposal or the “Golden Parachute” Compensation proposal, then the chairperson of the meeting may adjourn the meeting. The Discovery stockholders present at the Discovery special meeting shall not have the authority to adjourn the meeting. No notices of an adjourned meeting need to be given if the time and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken, unless the adjournment is for more than 30 days or the Discovery Board sets a new record date for such meeting, in which case a written notice of the place, date and time of the adjourned meeting will be given to each Discovery holder of record entitled to vote at the meeting. At any subsequent reconvening of the Discovery special meeting at which a quorum is present, any business may be transacted that might have been transacted at the original meeting and all proxies will be voted in the same manner as they would have been voted at the original convening of the Discovery special meeting, except for any proxies that have been effectively revoked or withdrawn prior to the time the proxy is voted at the reconvened meeting.

Assistance

If you need assistance in completing your proxy card or have questions regarding the Discovery special meeting, please contact Innisfree, the proxy solicitation agent for Discovery, at (877) 750-0854 (toll-free) or (212) 750-5833 (banks and brokerage firms).

Charter Amendment, Share Issuance and “Golden Parachute” Compensation Proposals

As discussed throughout this proxy statement/prospectus, Discovery is asking its stockholders to approve the Charter Amendment proposals, the Share Issuance proposal and the “Golden Parachute” Compensation proposal.

Proposal 1: Charter Amendment Proposals

Discovery is asking its stockholders to approve the Reclassification proposal, the Common Stock Authorization proposal, the Preferred Stock Authorization proposal, the Declassification proposal and the Additional Amendments proposal as part of the Charter Amendment proposals. Pursuant to the terms of the Merger Agreement, the Transactions will not be completed unless Discovery stockholders approve the Charter Amendment proposals and the Share Issuance proposal. If any of these proposals is not approved by the holders of the requisite number of shares of Discovery capital stock, then the Transactions will not occur. You should read carefully this proxy statement/prospectus in its entirety, including the annexes, for more detailed information concerning the Transactions and the Transaction Documents. In particular, you are directed to the Merger Agreement, the Separation Agreement and the form of the WBD charter, copies of which are attached as Annex A, Annex B and Annex F, respectively, to this proxy statement/prospectus and incorporated by reference herein.

Proposal 1A: Reclassification Proposal (Charter Amendment Proposals)

The Reclassification proposal asks Discovery stockholders to approve the amendment and restatement of the Discovery charter such that prior to the effective time of the Merger, (1) each share of Discovery Series A common stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter will be reclassified and automatically converted into one share of WBD common stock, (2) each share of Discovery Series B common stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter will be reclassified and automatically converted into one share of WBD common stock, (3) each share of Discovery Series C common stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter will be reclassified and automatically converted into one share of WBD common stock, (4) each share of Discovery Series A-1 preferred stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter will be reclassified and automatically converted into 13.11346315 shares of WBD common stock and (5) each share of Discovery Series C-1 preferred stock issued and outstanding or held by Discovery as treasury stock immediately prior to the effective time of the WBD charter will be reclassified and automatically converted into such number of shares of WBD common stock as the number of shares of Discovery Series C common stock such share of Discovery Series C-1 preferred stock would have been convertible into immediately prior to the effective time of the WBD charter, which, as of September 30, 2021, would have been 19.3648 shares of WBD common stock. The proposed amendment and restatement of the Discovery charter would also remove certain provisions of the Discovery charter that will be no longer applicable after the Reclassification. The full text of the form of the WBD charter reflecting the proposed amendment and restatement pursuant to the Charter Amendment proposals is attached as Annex F to this proxy statement/prospectus and is incorporated by reference herein.

This vote is separate and apart from the votes to approve the other Charter Amendment proposals, the Share Issuance proposal and the “Golden Parachute” Compensation proposal. Accordingly, you may vote to approve the Reclassification proposal and vote not to approve the other proposals and vice versa. The Reclassification proposal is conditioned upon the approval and completion of the other Charter Amendment proposals. If any of the other Charter Amendment proposals is not approved, this proposal will have no effect even if approved by Discovery stockholders. Because Discovery stockholder approval of the Charter Amendment proposals is a condition to completion of the Merger under the Merger Agreement, if this proposal is not approved by Discovery stockholders, the Merger will not occur unless Discovery and AT&T waive the applicable closing condition.

Approval of the Reclassification proposal at the Discovery special meeting requires the affirmative vote of (1) at least 75% of the outstanding shares of Discovery Series B common stock, voting as a class, (2) at least a majority of the outstanding shares of Discovery Series A-1 preferred stock, voting as a class, (3) at least a majority of the outstanding shares of Discovery Series C-1 preferred stock, voting as a class, and (4) at least a majority of the combined voting power of the outstanding shares of Discovery voting stock, voting together as a single class, present in person or represented by proxy at the Discovery special meeting and entitled to vote on such proposal.

THE DISCOVERY BOARD RECOMMENDS THAT DISCOVERY STOCKHOLDERS VOTE “FOR” THE RECLASSIFICATION PROPOSAL.

Proposal 1B: Common Stock Authorization Proposal (Charter Amendment Proposals)

The Common Stock Authorization proposal asks Discovery stockholders to approve the amendment and restatement of the Discovery charter to increase the authorized shares of WBD common stock to 10,800,000,000 shares. The full text of the form of the WBD charter reflecting the proposed amendment and restatement pursuant to the Charter Amendment proposals is attached as Annex F to this proxy statement/prospectus and is incorporated by reference herein.

As of the date of this proxy statement/prospectus, Discovery’s authorized capital stock consists of 1,700,000,000 shares of Discovery Series A common stock, 100,000,000 shares of Discovery Series B common stock, 2,000,000,000 shares of Discovery Series C common stock and 50,000,000 undesignated shares of Discovery preferred stock. As of the Discovery record date, Discovery had shares of Discovery Series A common stock issued and outstanding, shares of Discovery Series B common stock issued and outstanding, shares of Discovery Series C common stock issued and outstanding, shares of Discovery Series A-1 preferred stock issued and outstanding and shares of Discovery Series C-1 preferred stock issued and outstanding. Based on the number of shares of Discovery capital stock issued and outstanding as of the Discovery record date, Discovery expects to issue an aggregate of approximately shares of WBD common stock in the Reclassification. At the effective time of the Merger and following the Reclassification, Discovery expects to issue approximately shares of WBD common stock to Spinco stockholders. The actual number of shares of WBD common stock to be issued pursuant to the Merger will be determined at completion of the Merger based on the Merger exchange ratio as described in “The Transactions—Calculation of the Merger Consideration.” The Common Stock Authorization proposal is intended to provide adequate authorized share capital to accommodate the issuance of shares of WBD common stock pursuant to the Merger and to provide flexibility for future issuances of WBD common stock, including pursuant to WBD’s equity compensation plans and for other corporate purposes.

This vote is separate and apart from the votes to approve the other Charter Amendment proposals, the Share Issuance proposal and the “Golden Parachute” Compensation proposal. Accordingly, you may vote to approve the Common Stock Authorization proposal and vote not to approve the other proposals and vice versa. The Common Stock Authorization proposal is conditioned upon the approval and completion of the other Charter Amendment proposals. If any of the other Charter Amendment proposals is not approved, this proposal will have no effect even if approved by Discovery stockholders. Because Discovery stockholder approval of the Charter Amendment proposals is a condition to completion of the Merger under the Merger Agreement, if this proposal is not approved by Discovery stockholders, the Merger will not occur unless Discovery and AT&T waive the applicable closing condition.

Approval of the Common Stock Authorization proposal at the Discovery special meeting requires the affirmative vote of (1) at least 75% of the outstanding shares of Discovery Series B common stock, voting as a class, (2) at least a majority of the outstanding shares of Discovery Series A-1 preferred stock, voting as a class, (3) at least a majority of the outstanding shares of Discovery Series C-1 preferred stock, voting as a class, and (4) at least a majority of the combined voting power of the outstanding shares of Discovery voting stock, voting together as a single class, present in person or represented by proxy at the Discovery special meeting and entitled to vote on such proposal.

THE DISCOVERY BOARD RECOMMENDS THAT DISCOVERY STOCKHOLDERS VOTE “FOR” THE COMMON STOCK AUTHORIZATION PROPOSAL.

Proposal 1C: Preferred Stock Authorization Proposal (Charter Amendment Proposals)

The Preferred Stock Authorization proposal asks Discovery stockholders to approve the amendment and restatement of the Discovery charter to increase the authorized shares of WBD preferred stock to 1,200,000,000 shares. The full text of the form of the WBD charter reflecting the proposed amendment and restatement pursuant to the Charter Amendment proposals is attached as Annex F to this proxy statement/prospectus and is incorporated by reference herein.

As of the date of this proxy statement/prospectus, Discovery’s authorized capital stock consists of 1,700,000,000 shares of Discovery Series A common stock, 100,000,000 shares of Discovery Series B common stock, 2,000,000,000 shares of Discovery Series C common stock and 50,000,000 undesignated shares of Discovery preferred stock. As of the Discovery record date, Discovery had shares of Discovery Series A common stock issued and outstanding, shares of Discovery Series B common stock issued and outstanding, shares of Discovery Series C common stock issued and outstanding, shares of Discovery Series A-1 preferred stock issued and outstanding and shares of Discovery Series C-1 preferred stock issued and outstanding. Immediately following the Charter Amendment, no shares of WBD preferred stock are expected to be issued and outstanding and all shares of Discovery preferred stock would have been reclassified and automatically converted into such shares of WBD common stock as set forth in the Merger Agreement. The Preferred Stock Authorization proposal is intended to provide adequate authorized share capital to provide flexibility for future issuances of WBD preferred stock for corporate purposes.

This vote is separate and apart from the votes to approve the other Charter Amendment proposals, the Share Issuance proposal and the “Golden Parachute” Compensation proposal. Accordingly, you may vote to approve the Preferred Stock Authorization proposal and vote not to approve the other proposals and vice versa. The Preferred Stock Authorization proposal is conditioned upon the approval and completion of the other Charter Amendment proposals. If any of the other Charter Amendment proposals is not approved, this proposal will have no effect even if approved by Discovery stockholders. Because Discovery stockholder approval of the Charter Amendment proposals is a condition to completion of the Merger under the Merger Agreement, if this proposal is not approved by Discovery stockholders, the Merger will not occur unless Discovery and AT&T waive the applicable closing condition.

Approval of the Preferred Stock Authorization proposal at the Discovery special meeting requires the affirmative vote of (1) at least 75% of the outstanding shares of Discovery Series B common stock, voting as a class, (2) at least a majority of the outstanding shares of Discovery Series A-1 preferred stock, voting as a class, (3) at least a majority of the outstanding shares of Discovery Series C-1 preferred stock, voting as a class, and (4) at least a majority of the combined voting power of the outstanding shares of Discovery voting stock, voting together as a single class, present in person or represented by proxy at the Discovery special meeting and entitled to vote on such proposal.

THE DISCOVERY BOARD RECOMMENDS THAT DISCOVERY STOCKHOLDERS VOTE “FOR” THE PREFERRED STOCK AUTHORIZATION PROPOSAL.

Proposal 1D: Declassification Proposal (Charter Amendment Proposals)

The Declassification proposal asks Discovery stockholders to approve the amendment and restatement of the Discovery charter to declassify the WBD board of directors into one class of directors upon the election of directors at WBD’s third annual meeting of stockholders after the completion of the Merger and make certain related changes. The full text of the form of the WBD charter reflecting the proposed amendment and restatement pursuant to the Charter Amendment proposals is attached as Annex F to this proxy statement/prospectus and is incorporated by reference herein.

Currently, the Discovery charter provides for a classified board of directors divided into three classes of directors, with each class elected for three-year terms. The directors may be removed from office only for cause upon the affirmative vote of the holders of at least a majority of the total voting power of the then issued and outstanding shares of Discovery capital stock entitled to vote on such removals. In addition, any vacancy in the office of a common stock director resulting from death, resignation, removal, disqualification or other cause, and newly created directorships resulting from any increase in the number of directors on the Discovery Board, shall be filled only by the affirmative vote of a majority of the common stock directors then in office, even if less than a quorum, or by the sole remaining common stock director.

Pursuant to the Declassification proposal, until the election of directors at WBD’s third annual meeting of stockholders following the completion of the Merger, the WBD Board would be divided into three classes of directors with Class I consisting of four directors, Class II consisting of four directors and Class III consisting of five directors. Class I directors would have terms that expire at WBD’s first annual meeting of stockholders following the completion of the Merger, Class II directors would have terms that expire at WBD’s second annual meeting of stockholders following the completion of the Merger and Class III directors would have terms that expire at WBD’s third annual meeting of stockholders following the completion of the Merger; provided that the term of each director would continue until the election and qualification of a successor and be subject to such director’s earlier death, resignation or removal.

At WBD’s first annual meeting of stockholders following the completion of the Merger, successors to the Class I directors whose terms expire at WBD’s first annual meeting of stockholders following the completion of the Merger would be elected for a term expiring at WBD’s next annual meeting. At WBD’s second annual meeting of stockholders following the completion of the Merger, successors to the Class I directors whose terms expire at WBD’s second annual meeting following the completion of the Merger and successors to the Class II directors whose terms expire at WBD’s second annual meeting following the completion of the Merger would be elected for a term expiring at WBD’s next annual meeting.

Starting with the election of directors at WBD’s third annual meeting of stockholders following the completion of the Merger, the WBD Board would cease to be classified and all directors would have terms that expire at WBD’s next annual meeting. At each subsequent annual meeting of WBD stockholders, the successors of directors whose term expires at that meeting would be elected to hold office for a term of one year expiring at the annual meeting of WBD stockholders following the year of their election. Prior to WBD’s third annual meeting of stockholders after the completion of the Merger, directors may be removed only for cause by the affirmative vote of the holders of at least two-thirds of the issued and outstanding shares of WBD common stock then entitled to vote at any annual or special meeting of stockholders.

The Declassification proposal also provides that, prior to WBD’s first annual meeting of stockholders following the completion of the Merger, any vacancy resulting from the death, resignation or removal of any AT&T Designee or Discovery Designee would be filled solely by a majority of the directors designated by the entity that designated the director who died, resigned or was removed, even if less than a quorum. Any other vacancy on the WBD Board or any newly created directorships may be filled by a majority of the directors then in office, even if less than a quorum, or by a sole remaining director. Any director so elected would hold office for a term that would coincide with the term of the class in which such director would have been chosen or, following the termination of the classification of the WBD Board, each director so elected would hold office for a term that would expire at the next annual meeting of WBD stockholders held after such director’s election or until such director’s successor would have been elected and qualified or until such director’s earlier death, resignation or removal. No decrease in the number of directors constituting the WBD Board would shorten the term of any incumbent director.

proposal is conditioned upon the approval and completion of the other Charter Amendment proposals. If any of the other Charter Amendment proposals is not approved, this proposal will have no effect even if approved by Discovery stockholders. Because Discovery stockholder approval of the Charter Amendment proposals is a condition to completion of the Merger under the Merger Agreement, if this proposal is not approved by Discovery stockholders, the Merger will not occur unless Discovery and AT&T waive the applicable closing condition.

Approval of the Declassification proposal at the Discovery special meeting requires the affirmative vote of (1) at least 75% of the outstanding shares of Discovery Series B common stock, voting as a class, (2) at least a majority of the outstanding shares of Discovery Series A-1 preferred stock, voting as a class, (3) at least a majority of the outstanding shares of Discovery Series C-1 preferred stock, voting as a class, and (4) at least a majority of the combined voting power of the outstanding shares of Discovery voting stock, voting together as a single class, present in person or represented by proxy at the Discovery special meeting and entitled to vote on such proposal.

THE DISCOVERY BOARD RECOMMENDS THAT DISCOVERY STOCKHOLDERS VOTE “FOR” THE DECLASSIFICATION PROPOSAL.

Proposal 1E: Additional Amendments Proposal (Charter Amendment Proposals)

The Additional Amendments proposal asks Discovery stockholders to approve the amendment and restatement of the Discovery charter to provide for all other changes in connection with the amendment and restatement of the Discovery charter. These changes include:

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changing the corporate name of the combined company from “Discovery, Inc.” to “Warner Bros. Discovery, Inc.”;

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providing that prior to WBD’s third annual meeting of stockholders after the completion of the Merger, the WBD Board will consist of no more than 13 directors;

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providing that unless WBD consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of WBD, (2) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, employee, stockholder or agent of WBD to WBD or its stockholders, (3) any action or proceeding asserting a claim arising out of or pursuant to, or seeking to enforce any right, obligation or remedy under, any provision of the DGCL, or as to which the DGCL confers jurisdiction on the Court of Chancery (including, without limitation, any action asserting a claim arising out of or pursuant to the WBD charter or the bylaws of the combined company) or (4) any action or proceeding asserting a claim governed by the internal affairs doctrine;

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providing that unless WBD consents in writing to the selection of an alternative forum, the federal district courts of the United States will, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, the Exchange Act and the rules and regulations thereunder;

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providing that the WBD charter may be amended, altered or repealed in the manner prescribed by the DGCL, except that the amendment of certain provisions of the WBD charter will require approval at a meeting of WBD stockholders called for that purpose by the affirmative vote of the holders of at least a majority of the outstanding shares of WBD common stock then entitled to vote at any annual or special meeting of WBD stockholders, notwithstanding that a lesser percentage may be permitted from time to time by applicable law;

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providing that the WBD Board is expressly authorized to amend, alter or repeal the bylaws of the combined company, without the assent or vote of WBD stockholders, and that any such amendment,

alteration or repeal will require the affirmative vote of at least a majority of the directors then in office; and

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providing that except as otherwise required by law and subject to the rights of the holders of shares of any then outstanding class or series of WBD preferred stock, a special meeting of the stockholders may be called only by the Chairperson of the WBD Board or the Chief Executive Officer of WBD or pursuant to a resolution of the WBD Board adopted by at least a majority of the directors then in office.

The Additional Amendments proposal also provides for certain other changes, including technical changes, which Discovery and AT&T have agreed upon in connection with the Transactions. While certain material changes between the Discovery charter and WBD charter have been unbundled into distinct Charter Amendment proposals or otherwise identified in this Additional Amendments proposal, there are other changes in connection with the amendment and restatement of the Discovery charter that will be approved if Discovery stockholders approve this Additional Amendments proposal. Accordingly, you are encouraged to read carefully the full text of the form of the WBD charter reflecting the proposed amendment and restatement pursuant to the Charter Amendment proposals, which is attached as Annex F to this proxy statement/prospectus and is incorporated by reference herein.

This vote is separate and apart from the votes to approve the other Charter Amendment proposals, the Share Issuance proposal and the “Golden Parachute” Compensation proposal. Accordingly, you may vote to approve the Additional Amendments proposal and vote not to approve the other proposals and vice versa. The Additional Amendments proposal is conditioned upon the approval and completion of the other Charter Amendment proposals. If any of the other Charter Amendment proposals is not approved, this proposal will have no effect even if approved by Discovery stockholders. Because Discovery stockholder approval of the Charter Amendment proposals is a condition to completion of the Merger under the Merger Agreement, if this proposal is not approved by Discovery stockholders, the Merger will not occur unless Discovery and AT&T waive the applicable closing condition.

Approval of the Additional Amendments proposal at the Discovery special meeting requires the affirmative vote of (1) at least 75% of the outstanding shares of Discovery Series B common stock, voting as a class, (2) at least a majority of the outstanding shares of Discovery Series A-1 preferred stock, voting as a class, (3) at least a majority of the outstanding shares of Discovery Series C-1 preferred stock, voting as a class, and (4) at least a majority of the combined voting power of the outstanding shares of Discovery voting stock, voting together as a single class, present in person or represented by proxy at the Discovery special meeting and entitled to vote on such proposal.

THE DISCOVERY BOARD RECOMMENDS THAT DISCOVERY STOCKHOLDERS VOTE “FOR” THE ADDITIONAL AMENDMENTS PROPOSAL.

Proposal 2: Share Issuance Proposal

Pursuant to the terms of the Merger Agreement, the Transactions will not be completed unless Discovery stockholders approve the Charter Amendment proposals and the Share Issuance proposal. If any of these proposals is not approved by the holders of the requisite number of shares of Discovery capital stock, then the Transactions will not occur. You should read carefully this proxy statement/prospectus in its entirety, including the annexes, for more detailed information concerning the Transactions and the Transaction Documents. In particular, you are directed to the Merger Agreement and the Separation Agreement, copies of which are attached as Annex A and Annex B, respectively, to this proxy statement/prospectus and incorporated by reference herein.

At the effective time of the Merger, each share of Spinco common stock issued and outstanding as of the effective time of the Merger will automatically convert into the right to receive a number of shares of WBD common stock. Based on the number of shares of Spinco common stock expected to be issued and outstanding as

of the effective time of the Merger, Discovery expects to issue approximately shares of WBD common stock to Spinco stockholders. The actual number of shares of WBD common stock to be issued pursuant to the Merger will be determined at completion of the Merger based on the Merger exchange ratio as described in “The Transactions—Calculation of the Merger Consideration.” Immediately after the Merger, it is expected that holders of Spinco common stock as of immediately prior to the Merger will collectively hold approximately 71% of the outstanding shares of WBD common stock on a fully diluted basis and holders of Discovery capital stock as of immediately prior to the Reclassification and the Merger will collectively hold approximately 29% of the outstanding shares of WBD common stock on a fully diluted basis, in each case, excluding any overlaps in the pre-Merger AT&T and Discovery stockholder bases.

This vote is separate and apart from the votes to approve the Charter Amendment proposals and the “Golden Parachute” Compensation proposal. Accordingly, you may vote to approve the Share Issuance proposal and vote not to approve the other proposals and vice versa. Because Discovery stockholder approval of the Share Issuance proposal is a condition to completion of the Merger under the Merger Agreement, if this proposal is not approved by Discovery stockholders, the Merger will not occur unless Discovery and AT&T waive the applicable closing condition.

Approval of the Share Issuance proposal at the Discovery special meeting requires the affirmative vote of at least a majority of the combined voting power of the outstanding shares of Discovery voting stock, voting together as a single class, present in person or represented by proxy at the Discovery special meeting and entitled to vote on such proposal.

THE DISCOVERY BOARD RECOMMENDS THAT DISCOVERY STOCKHOLDERS VOTE “FOR” THE SHARE ISSUANCE PROPOSAL.

Proposal 3: “Golden Parachute” Compensation Proposal

Under Section 14A of the Exchange Act, Discovery is required to provide its stockholders with the opportunity to vote to approve, on an advisory (non-binding) basis, the compensation that will or may be made by Discovery to its named executive officers in connection with the Merger, as disclosed in “The Transactions—Interests of Discovery’s Directors and Executive Officers in the Transactions—Quantification of Potential Payments to Discovery’s Named Executive Officers in Connection with the Merger,” including the table titled “‘Golden Parachute’ Compensation” and accompanying footnotes. Accordingly, Discovery stockholders are being provided with the opportunity to cast an advisory vote on such payments. The Discovery Board encourages you to carefully review the “Golden Parachute” Compensation information disclosure in this proxy statement/prospectus.

The Discovery Board unanimously recommends that its stockholders adopt the following resolution, on an advisory (non-binding) basis:

“RESOLVED, that the stockholders of Discovery, Inc. approve, on an advisory (non-binding) basis, the compensation that will or may become payable to the named executive officers of Discovery, Inc. in connection with the Merger, as disclosed pursuant to Item 402(t) of Regulation S-K in ‘The Transactions—Interests of Discovery’s Directors and Executive Officers in the Transactions—Quantification of Potential Payments to Discovery’s Named Executive Officers in Connection with the Merger’ (which disclosure includes the ‘Golden Parachute’ Compensation table required pursuant to Item 402(t) of Regulation S-K).”

This vote is separate and apart from the votes to approve the Charter Amendment proposals and the Share Issuance proposal. Accordingly, you may vote to approve the “Golden Parachute” Compensation proposal and vote not to approve the other proposals and vice versa.

As an advisory vote, the “Golden Parachute” Compensation proposal is not binding upon Discovery, the Discovery Board or the compensation committee of the Discovery Board (the “Discovery Compensation

Committee”) and approval of this proposal is not a condition to completion of the Merger. Accordingly, if the Merger is completed, the compensation payments described in the “Golden Parachute” Compensation proposal that are contractually required to be paid by Discovery to its named executive officers will remain in place, subject only to the existing conditions applicable thereto, regardless of the outcome of the advisory (non-binding) vote of Discovery stockholders.

Approval, on an advisory (non-binding) basis, of the “Golden Parachute” Compensation proposal at the Discovery special meeting requires the affirmative vote of at least a majority of the combined voting power of the outstanding shares of Discovery voting stock, voting together as a single class, present in person or represented by proxy at the Discovery special meeting and entitled to vote on such proposal.

THE DISCOVERY BOARD RECOMMENDS THAT DISCOVERY STOCKHOLDERS VOTE “FOR” THE “GOLDEN PARACHUTE” COMPENSATION PROPOSAL.

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PARTIES TO THE TRANSACTIONS

Information about Discovery

Discovery is a global media company that provides content across multiple distribution platforms, including linear platforms such as pay-TV, free-to-air and broadcast television, authenticated GO applications, digital distribution arrangements, content licensing arrangements and next generation DTC subscription products, including discovery+, the definitive real-life subscription service. As one of the world’s largest pay-TV programmers, as of December 31, 2020, Discovery provided original and purchased content and live events to approximately 3.7 billion cumulative subscribers and viewers worldwide through networks that it wholly or partially owns. As of September 30, 2021, Discovery had 20 million total paying DTC subscribers.¹ Discovery distributes customized content in the United States and over 220 other countries and territories in nearly 50 languages. Discovery has an extensive library of content and owns most rights to its content and footage, which enables Discovery to leverage its library to quickly launch brands and services into new markets and on new platforms. Discovery’s content can be re-edited and updated in a cost-effective manner to provide topical versions of subject matter that can be utilized around the world on a variety of platforms.

Discovery’s content spans genres including survival, natural history, exploration, sports, general entertainment, home, food, travel, heroes, adventure, crime and investigation, health and kids. Discovery’s global portfolio of networks includes prominent nonfiction television brands such as Discovery Channel, its most widely distributed global brand, HGTV, Food Network, TLC, Animal Planet, Investigation Discovery, Travel Channel, Science and MotorTrend (previously known as Velocity domestically and currently known as Turbo in most international countries). Among other networks in the United States, Discovery also features two Spanish-language services, Discovery en Español and Discovery Familia. Discovery’s international portfolio also includes Eurosport, a leading sports entertainment provider and broadcaster of the Olympic Games across Europe (excluding Russia); TVN, a Polish media company; as well as Discovery Kids, a leading children’s entertainment brand in Latin America. Discovery participates in joint ventures including Magnolia, the recently formed multi-platform venture with Chip and Joanna Gaines, and Group Nine Media, a digital media holding company home to top digital brands including Now This News, the Dodo, Thrillist, PopSugar and Seeker. Discovery also operates production studios.

In January 2021, Discovery launched discovery+ in the United States across several streaming platforms and entered into a partnership with Verizon, which is offering access to discovery+ for up to 12 months to certain of its customers. The global rollout of discovery+ began in the fourth quarter of 2020 with the United Kingdom and Ireland, where Discovery partnered with Sky, and in India. Discovery also entered into a partnership with Vodafone to provide discovery+ to existing Vodafone TV and mobile customers in 12 markets across Europe. To date, Discovery has launched discovery+ in 25 global territories. Upon launch in the United States, discovery+ included an extensive content library comprising more than 55,000 episodes and features a wide array of exclusive, original series from the Discovery portfolio of brands that have a strong leadership position. The service is available with ads or on an ad-free tier, providing Discovery with dual revenue streams.

Discovery invests in high-quality content for its networks and brands with the objective of building viewership, optimizing distribution revenue, capturing advertising revenue, and creating or repositioning branded channels and business to sustain long-term growth and occupy a desired content niche with strong consumer appeal. Its strategy is to maximize the distribution, ratings and profit potential of each of its branded networks. In addition to growing distribution and advertising revenues for its branded networks, Discovery has extended content distribution across new platforms, including brand-aligned websites, online streaming platforms,

Discovery defines a subscription as: (1) a subscription to a DTC product for which it has recognized subscription revenue from a DTC platform; (2) a subscription received through wholesale arrangements in which it receives a fee for the distribution of its DTC platforms, as well as subscriptions provided directly or through third-party platforms; and (3) a subscription recognized by certain joint venture partners and affiliated parties. Discovery may refer to the aggregate number of subscriptions across its DTC services as subscribers. Subscribers are only counted if they are on a paying status and exclude users on free trials.

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including discovery+, mobile devices, video-on-demand, and broadband channels, which provide promotional platforms for its television content and serve as additional outlets for advertising and distribution revenue. Audience ratings are a key driver in generating advertising revenue and creating demand on the part of cable television operators, direct-to-home satellite operators, telecommunication service providers, and other content distributors who deliver Discovery’s content to their customers.

As of September 30, 2021, Discovery had approximately 11,000 employees, including full-time and part-time employees of its wholly owned subsidiaries and consolidated ventures. Discovery’s employees are located in 36 different countries, with 38% located in the United States and 62% located outside of the United States.

Discovery Series A common stock, Discovery Series B common stock and Discovery Series C common stock are listed on Nasdaq under the symbols “DISCA,” “DISCB” and “DISCK,” respectively.

Discovery’s principal executive office is located at 230 Park Avenue South, New York, New York 10003 (telephone number: (212) 548-5555).

Business Segments

Although Discovery utilizes certain brands and content globally, Discovery classifies its operations in two reportable segments: U.S. Networks, consisting principally of domestic television networks and digital content services, and International Networks, consisting primarily of international television networks and digital content services. Discovery’s segment presentation aligns with its management structure and the financial information Discovery management uses to make decisions about operating matters, such as the allocation of resources and business performance assessments.

U.S. Networks

Discovery’s U.S. Networks segment principally consists of national television networks. Discovery’s U.S. Networks segment owns and operates 16 national television networks, including fully distributed television networks such as Discovery Channel, HGTV, Food Network, TLC and Animal Planet. In addition, Discovery operates the following U.S. Networks: MotorTrend, Investigation Discovery, Travel Channel, Science, Discovery Family, American Heroes Channel, Destination America, Discovery Life, DIY Network, Cooking Channel and OWN. In 2021, Discovery launched discovery+ in the United States, which included an extensive content library comprising more than 55,000 episodes and features a wide array of exclusive, original series from the Discovery portfolio of brands that have a strong leadership position. Discovery also continues to provide authenticated U.S. TV Everywhere (“TVE”) streaming products that are available to pay-TV subscribers and connect viewers through its GO applications with live and on-demand access to award-winning shows and series from certain U.S. Networks in the Discovery portfolio and from Discovery Familia and Discovery en Español. Furthermore, Discovery provides certain networks to consumers as part of subscription-based over-the-top services provided by DirectTV Now, AT&T Watch, Hulu, SlingTV, fuboTV, and YouTube TV.

U.S. Networks generates revenues from fees charged to distributors of Discovery’s television networks’ first run content, which includes cable, DTH satellite and telecommunication service providers, referred to as affiliate fees; fees from distributors for licensed content and content to equity method investee networks, referred to as other distribution revenue; fees from advertising sold on Discovery’s television networks and digital products, which include discovery+, Discovery’s GO suite of TVE applications and other DTC subscription products; fees from providing sales representation, network distribution services; and revenue from licensing Discovery’s brands for consumer products. Typically, Discovery’s television networks are aired pursuant to multi-year carriage agreements that provide for the level of carriage that Discovery’s networks will receive and for annual graduated rate increases. Carriage of Discovery’s networks depends on package inclusion, such as whether networks are on the more widely distributed, broader packages or lesser-distributed, specialized packages, also

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referred to as digital tiers. In 2020, in the United States, approximately 95% of Discovery’s distribution revenues came from the top ten distributors, with whom Discovery has agreements that expire at various times. Distribution fees are typically collected ratably throughout the year. Certain of Discovery’s DTC products, including the launch of Discovery’s aggregated discovery+ service in January 2021, provide dual revenue streams.

Advertising revenue is generated across multiple platforms and is based on the price received for available advertising spots and is dependent upon a number of factors including the number of subscribers to Discovery’s channels, viewership demographics, the popularity of Discovery’s programming, Discovery’s ability to sell commercial time over a portfolio of channels and leverage multiple platforms to connect advertisers to target audiences. In the United States, advertising time is sold in the upfront and scatter markets. In the upfront market, advertisers buy advertising time for upcoming seasons and, by committing to purchase in advance, lock in the advertising rates they will pay for the upcoming year. Many upfront advertising commitments include options whereby advertisers may reduce or increase purchase commitments. In the scatter market, advertisers buy advertising closer to the time when the commercials will be run, which often results in a pricing premium compared to the upfront rates. The mix of upfront and scatter market advertising time sold is based upon the economic conditions at the time that upfront sales take place, impacting the sell-out levels Discovery management is willing or able to obtain. The demand in the scatter market then impacts the pricing achieved for Discovery’s remaining advertising inventory. Scatter market pricing can vary from upfront pricing and can be volatile.

International Networks

Discovery’s International Networks segment principally consists of national and pan-regional television networks and brands that are delivered across multiple distribution platforms. This segment generates revenue from operations in virtually every pay-TV market in the world through an infrastructure that includes operational centers in London, Amsterdam, Warsaw, Milan, Singapore and Miami. Global brands include Discovery Channel, Food Network, HGTV, Animal Planet, TLC, ID, Science and MotorTrend (known as Turbo outside of the United States), along with brands exclusive to International Networks, including Eurosport, Discovery Kids, DMAX, Discovery Home & Health, and TVN. TVN was acquired in March 2018, as part of Discovery’s acquisition of Scripps. As of December 31, 2020, International Networks operated unique distribution feeds in nearly 50 languages with channel feeds customized according to language needs and advertising sales opportunities. International Networks also has free-to-air networks in Europe and the Middle East and broadcast networks in Poland, Denmark, Norway, Sweden and Finland, and continues to pursue further international expansion. The global rollout of discovery+ is underway; Discovery has launched the product in 25 global territories to date. Discovery has partnerships for discovery+ with Sky in the United Kingdom and Ireland and with Vodafone to provide discovery+ to existing Vodafone TV and mobile customers in 12 markets across Europe.

Free-to-air and broadcast networks generate a significant portion of International Networks’ revenue. The penetration and growth rates of television services vary across countries and territories depending on numerous factors including the dominance of different television platforms in local markets. While pay-TV services have greater penetration in certain markets, free-to-air or broadcast television is dominant in others. International Networks has a large international distribution platform with more than 80 networks, with as many as 23 networks distributed in any particular country or territory across more than 220 countries and territories around the world. International Networks pursues distribution across all television platforms based on the specific dynamics of local markets and relevant commercial agreements.

With the growing demand for consumer content on digital and mobile devices, a suite of international DTC products has been made available to consumers. dplay, Discovery’s previous streaming service in certain international markets, was rebranded to Discovery’s global streaming service, discovery+, in the United Kingdom and Ireland during the fourth quarter of 2020, and in the remainder of the dplay markets, including the Nordics, Italy, and the Netherlands, in 2021. Discovery has expanded its DTC offerings across more than 25

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key markets during 2021 by leveraging its library of local-language content, as well as its broad portfolio of live sports. Discovery also continues to offer its Eurosport streaming service, Eurosport Player, which provides premium and localized sports to fans in 52 markets in Europe. This service is expected to continue to be available until Eurosport Player’s content is fully integrated into the discovery+ service in all applicable markets.

Similar to U.S. Networks, a significant source of revenue for International Networks also relates to fees charged to operators who distribute Discovery’s linear networks. Such operators primarily include cable and DTH satellite service providers. International television markets vary in their stages of development. Some markets, such as the United Kingdom, are more advanced digital television markets, while others remain in the analog environment with varying degrees of investment from operators to expand channel capacity or convert to digital technologies. Common practice in some markets results in long-term contractual distribution relationships, while customers in other markets renew contracts annually. Distribution revenue for Discovery’s International Networks segment is largely dependent on the number of subscribers that receive Discovery’s networks or content, the rates negotiated in the distributor agreements, and the market demand for the content that Discovery provides. International Networks additionally generates revenues through DTC subscription services.

The other significant source of revenue for International Networks relates to advertising sold on Discovery’s television networks and across distribution platforms, similar to U.S. Networks. Advertising revenue is dependent upon a number of factors, including the development of pay-TV and free-to-air television markets, the number of subscribers to and viewers of Discovery’s channels, viewership demographics, the popularity of Discovery’s programming, and Discovery’s ability to sell commercial time over a portfolio of channels on multiple platforms. In certain markets, Discovery’s advertising sales business operates with in-house sales teams, while Discovery relies on external sales representation services in other markets. Outside the United States, advertisers typically buy advertising closer to the time when the commercials will be run. In developing pay-TV markets, Discovery expects advertising revenue growth will result from subscriber growth, its localization strategy, and the shift of advertising spending from broadcast to pay-TV. In mature markets, such as Western Europe, high proportions of market penetration and distribution are unlikely to drive rapid revenue growth. Instead, growth in advertising sales comes from increasing viewership and pricing and launching new services, either in pay-TV, broadcast, or free-to-air television environments.

WBD’s Business after the Transactions

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Information about AT&T

AT&T is a Delaware corporation formed in 1983 (formerly, SBC Communications Inc.) as one of several regional holding companies created to hold ATTC’s local telephone companies. On January 1, 1984, AT&T was spun off from ATTC pursuant to an antitrust consent decree, becoming an independent publicly traded telecommunications services provider. At formation, AT&T primarily operated in five southwestern states. Following its formation, AT&T has expanded its footprint and operations by acquiring various businesses, most significantly:

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Its subsidiaries merged with Pacific Telesis Group in 1997, Southern New England Telecommunications Corporation in 1998 and Ameritech Corporation in 1999, thereby expanding its wireline operations as the incumbent local exchange carrier (“ILEC”) into a total of 13 states.

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In 2005, AT&T merged one of its subsidiaries with ATTC, creating one of the world’s leading telecommunications providers. In connection with the merger, it changed the name of the company from “SBC Communications Inc.” to “AT&T Inc.”

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In 2006, AT&T merged one of its subsidiaries with BellSouth Corporation (“BellSouth”) making AT&T the ILEC in an additional nine states. With the BellSouth acquisition, it also acquired BellSouth’s 40 percent economic interest in AT&T Mobility LLC (“AT&T Mobility”), formerly Cingular Wireless LLC, resulting in 100 percent ownership of AT&T Mobility.

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In 2014, AT&T completed the acquisition of wireless provider Leap Wireless International, Inc. and sold its ILEC operations in Connecticut, which it had previously acquired in 1998.

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In 2015, AT&T acquired wireless properties in Mexico, and acquired DIRECTV, a leading provider of digital television entertainment services in both the United States and Latin America.

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In 2018, AT&T acquired Time Warner Inc. (“Time Warner”), a leader in media and entertainment that operates Turner, Home Box Office (“HBO”) and Warner Bros. AT&T also acquired The Chernin Group’s controlling interest in Otter Media Holdings and acquired advertising platform AppNexus in August 2018.

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In 2020, AT&T sold its wireless and wireline operations in Puerto Rico and the U.S. Virgin Islands.

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In July 2021, AT&T closed its transaction with TPG Capital to form a new company named DIRECTV to own and operate AT&T’s former U.S. video business unit consisting of the DIRECTV, AT&T TV and U-verse video services.

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In July 2021, AT&T agreed to sell its Vrio business unit, which provides video services primarily to residential customers using satellite technology in Latin America and the Caribbean, to Grupo Werthein. The sale closed on November 15, 2021.

AT&T’s principal executive offices are located at 208 S. Akard St., Dallas, Texas, 75202, and its telephone number is (210) 821-4105. AT&T’s website address is www.att.com. This website address is for information only and is not intended to be an active link or to be incorporated by reference into or part of this proxy statement/prospectus.

With approximately 180,000 employees worldwide (excluding employees of the WarnerMedia Business) as of September 30, 2021, AT&T is a leading provider of telecommunications, media and technology services globally. The services and products that AT&T offers vary by market and utilize various technology platforms in a range of geographies. AT&T’s worldwide operations are reported in three reportable segments: (1) Communications, (2) WarnerMedia and (3) Latin America.

The Communications segment provides wireless and wireline telecom and broadband services to consumers located in the United States and businesses globally. AT&T’s business strategies reflect bundled product offerings that cut across product lines and utilize shared assets. This segment contains the following business units:

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Mobility provides nationwide wireless service and equipment.

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Business Wireline provides advanced IP-based services, as well as traditional voice and data services to business customers.

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Consumer Wireline provides internet, including broadband fiber, and legacy telephony voice communications services to residential customers.

The WarnerMedia segment develops, produces and distributes feature films, television programming, gaming and other content in various physical and digital formats, as well as consumer products globally. WarnerMedia audiovisual content is distributed primarily through theatrical distribution, television networks and programming services/platforms, including premium pay-TV and advertising-supported television platforms and DTC offerings over the internet, and through home entertainment distribution (DVDs and digital products). For more information on this segment, see “—Information about the WarnerMedia Business.”

The Latin America segment provides entertainment and wireless services outside of the United States. This segment contains the following business units:

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Vrio provides video services primarily to residential customers using satellite technology in Latin America and the Caribbean.

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Mexico provides wireless service and equipment to customers in Mexico.

On July 21, 2021, AT&T entered into an agreement to sell its Vrio business to Grupo Werthein. AT&T has applied held-for-sale accounting to Vrio as of June 30, 2021 and continues to present the Vrio results within the Latin America segment consistent with how performance was assessed and resource allocation decisions were made through June 30, 2021. The sale closed on November 15, 2021.

Corporate and Other reconciles AT&T’s segment results to consolidated operating income and income before income taxes, and includes:

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Corporate, which consists of: (1) businesses no longer integral to AT&T’s operations or which AT&T no longer actively markets, (2) corporate support functions, (3) impacts of corporate-wide decisions for which the individual operating segments are not being evaluated, and (4) the reclassification of the amortization of prior service credits, which AT&T continues to report with segment operating expenses, to consolidated “Other income (expense) - net.” Costs previously allocated to the Video business that were retained after the DIRECTV transaction, net of reimbursements from DIRECTV under transition service agreements, are reported in Corporate for the remainder of 2021, to maintain comparability of our operating segment results, and while operational plans and continued cost reduction initiatives are implemented.

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Video, which consisted of AT&T’s former U.S. video operations that were contributed to DIRECTV on July 31, 2021.

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Acquisition-related items, which consists of items associated with the merger and integration of acquired or divested businesses, including amortization of intangible assets.

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Certain significant items, which includes (1) employee separation charges associated with voluntary and/or strategic offers, (2) asset impairments and abandonments, and (3) other items for which the segments are not being evaluated.

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Eliminations and consolidations, which (1) removes transactions involving dealings between AT&T’s segment, including channel distribution between WarnerMedia and Video prior to its separation, and (2) includes adjustments for AT&T’s reporting of the advertising business.

For a more detailed description of AT&T’s business, see AT&T’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021 and Annual Report on Form 10-K for the year ended December 31, 2020, each as filed with the SEC, and Current Report on Form 8-K, as filed with the SEC on June 21, 2021

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(which updates AT&T’s audited financial statements contained in its Annual Report on Form 10-K for the fiscal year ended December 31, 2020), each of which is incorporated by reference into this proxy statement/prospectus. See “Where You Can Find More Information; Incorporation by Reference.”

Information about the WarnerMedia Business

Overview

The WarnerMedia Business is a global media and entertainment company that develops, produces and acquires feature films, television, gaming and other content for monetization in various media outlets including theatrically, its own and third-party basic and premium pay-TV, free-to-air television, DTC services, live events and physical/digital retail.

Business Segments and Products

The WarnerMedia Business is organized as an integrated content organization that operates as a single segment. Content creation, distribution, and programming are centrally managed to ensure that the highest-quality content is available to consumers on the optimal platform or format on a worldwide basis. In 2020, the WarnerMedia Business generated $28.1 billion of revenue globally. The following table sets forth the WarnerMedia Business’s global revenue by category:


Global Revenue	For the Year Ended December 31, 2020 (U.S. Dollars, billions)
Subscription	$	10.8
Advertising		3.9
Content		9.3
Related Party		3.4
Other		0.8

Total	$	28.1

The WarnerMedia Business’s subscription revenue consists principally of subscriber-based revenue from HBO networks (both traditional linear and legacy streaming on-demand offerings) and the HBO Max streaming platform, as well as from the WarnerMedia Business’s basic networks. HBO’s networks (including Cinemax) are available in the United States and internationally to subscribers through traditional and digital distributors on a premium pay basis and, in certain territories, in the basic television tier, as well as directly to consumers. The HBO Max platform is made available by the WarnerMedia Business on an over-the-top subscription basis through the internet directly to consumers and through third-party distribution partners. HBO Max launched in the United States in May 2020 with an advertising-free service, in Latin America and the Caribbean in June 2021 and in Sweden, Norway, Denmark, Finland, Spain and Andorra in October 2021, with further European expansion planned for 2022. The WarnerMedia Business’s pay-TV networks are primarily delivered by traditional television distributors, such as cable, satellite, and telecommunications service providers, as well as digital distributors, and are available to subscribers of the distributors for viewing live and on demand through the distributors’ services and companion network apps.

The WarnerMedia Business’s advertising revenue consists primarily of advertising arrangements for its basic pay-TV networks and related properties, and going forward will include the advertising-supported tier of HBO Max, which launched in the United States in June 2021. In the United States and internationally, advertising revenues generally depend on the size and demographics of a network’s audience delivered to an advertiser, the number of units of time sold and the price per unit. The price per unit of advertising is determined considering factors such as the type of program or network, the level of targeting and/or the time of day the advertising is to be run. Certain advertising inventory is sold in the “upfront” market in advance each year and other inventory is sold in the “scatter” market closer to the time that a program airs.

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The WarnerMedia Business’s content revenue consists principally of licensing feature films for initial theatrical exhibition, and films and television programs for traditional television broadcast and distribution via digital platforms, including via free-to-air, basic and premium pay-TV; television syndication; and streaming services. Content revenue also includes home entertainment sales and rentals of film and television products (physical and digital, including premium video-on-demand, transactional video-on-demand and electronic sell-through), publishing and distribution of interactive entertainment (physical and digital) across all platforms, comic book and other book publishing, and consumer products licensing.

The WarnerMedia Business uses the content it produces across its various branded programming services and distribution platforms, including its traditional linear networks and the HBO Max platform. The television and film programming content that the WarnerMedia Business produces is also licensed to third parties for use as part of their various video services and platforms. The WarnerMedia Business also acquires television and film programming content from third parties to include as part of its branded services and platforms. Decisions relating to content development and production are dependent upon finding optimal audiences and distribution outlets. In response to the general disruptions to consumer behavior and entertainment options caused by the COVID-19 pandemic, the WarnerMedia Business has adapted by trying variations on traditional theatrical distribution models, such as “day and date” release windowing for certain films for on-demand and theatrical availability and the shortening of the traditional theatrical window for others, and exploring other hybrid models. As consumers demand more and different optionality over how and when to consume their favorite content, traditional distribution models for the WarnerMedia Business can be expected to continue to adapt and evolve responsively.

The WarnerMedia Business’s product offerings include:

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Pay-TV networks and related properties primarily delivered by distributors as a subscription service including:

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Premium pay-TV services, including HBO and Cinemax;

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Basic television networks, including TNT, TBS, CNN, HLN, Cartoon Network, Adult Swim, Boomerang, truTV, Turner Classic Movies and the Warner Channel; and

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As part of its networking offerings, live sports including NBA, MLB, NHL, soccer (Argentine Primera División and Chilean Primera División) and the NCAA Division 1 Men’s Basketball Tournament;

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The HBO Max platform;

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Advertising products primarily from the sale of units of time on the WarnerMedia Business’s basic networks, with additional revenue earned from advertising on related digital platforms including on HBO Max’s advertising-supported tier;

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Feature films;

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Television series including animation, scripted and unscripted content;

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Interactive entertainment (e.g., games) across all platforms (console, PC and mobile);

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Comic books and graphic novels;

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Consumer products licensing, such as brand and character intellectual property for merchandising and themed entertainment;

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Studio tours and retail stores; and

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Branded digital properties including Bleacher Report and CNN Digital.

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Major Customers and Competition

As of September 30, 2021, the WarnerMedia Business had approximately 69.4 million HBO Max/HBO subscribers globally. HBO’s original programming is also licensed to third-party television networks and digital platforms in certain territories outside of the United States, and is also made available to customers in both physical and digital home video formats in both the United States and various international regions. Pay-TV network programming is primarily delivered by distributors and is available to subscribers of the distributors for viewing on a linear and on-demand basis through the distributors’ services and network apps. As a provider of advertising-supported programming services, the WarnerMedia Business is also active in the business of third-party advertising sales. The WarnerMedia Business does not believe it is dependent on any significant customers.

The WarnerMedia Business continues to face shifts in consumer viewing patterns, increased competition from streaming services and expansion by other companies—in particular, technology companies—into the content production, acquisition and distribution space. The WarnerMedia Business competes with other studios and television production groups and independent producers that develop, produce, acquire and sell programming. Many television networks, technology companies and online platforms are investing in content. The WarnerMedia Business’s television networks and premium pay-TV and basic tier television services and the HBO Max platform also face competition from other television networks, online platforms/streaming video service providers, and pay-TV service providers. In addition, the WarnerMedia Business faces rising competition for consumer attention from social media, games, short-form video and other digital offerings.

The WarnerMedia Business’s creative and distribution groups work together using their strong brands, distinctive intellectual property and global reach to produce and distribute content that resonates deeply with consumers. As the television industry continues to evolve, with developments in technology, rapid growth of new video services and shifting consumer viewing habits, the WarnerMedia Business believes that it is well-positioned to address and capitalize on these changes. Accordingly, the WarnerMedia Business is focused on both its position within the traditional TV ecosystem and pursuing growth opportunities outside that ecosystem, including increasing the content and services offered directly to consumers (for example, through HBO Max).

Employees

Number of Employees

As of November 1, 2021, the WarnerMedia Business employed approximately 29,000 employees around the world. The WarnerMedia Business is currently led by senior leaders who have extensive experience in their respective fields. Approximately 68% of the WarnerMedia Business’s employees are located in the United States and approximately 32% are based outside of the United States.

Employees Development

The WarnerMedia Business believes its success depends on its employees’ success and that all employees must have the skills they need to thrive. Through partnerships with external learning platforms and development programs as well as learning content developed by internal experts, the WarnerMedia Business offers training and elective courses and programs that give employees the opportunity to enhance their skills and capabilities.

Labor Contracts

In addition to the headcount mentioned above, the WarnerMedia Business and some of its suppliers and business partners retain the services of writers, directors, actors, announcers, athletes, technicians, trade employees and others involved in the development and production of its television programming and feature films who are covered by collective bargaining agreements. A significant portion of its production employees are union-represented by trade and labor organizations such as the International Alliance of Theatrical & Stage Employees & Motion Picture Technicians, Artists (IATSE) and Screen Actors Guild - American Federation of

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Television and Radio Artists (SAG-AFTRA). After expiration of the collective bargaining agreements, work stoppages or labor disruptions may occur in the absence of new contracts or other agreements being reached. The WarnerMedia Business has approximately 10-15 contracts expiring before the end of 2021.

Compensation and Benefits

In addition to salaries, the WarnerMedia Business provides a variety of benefit programs to help meet the needs of its employees. These programs cover active and former employees and may vary by subsidiary and region. These programs include 401(k) plans, retirement benefits, and health and welfare benefits, among many others. In addition to its active employee base, as of December 31, 2020, the WarnerMedia Business had approximately 2,000 retirees and dependents that were eligible to receive retiree benefits.

The WarnerMedia Business reviews its compensation and benefit plans to maintain competitive packages that reflect the needs of its workforce. The WarnerMedia Business also adapts its compensation model to provide fair and inclusive pay practices across its business. The WarnerMedia Business is committed to pay equity for employees who hold the same jobs, work in the same geographic area, and have the same levels of experience and performance.

Employee Safety

The WarnerMedia Business provides its employees access to flexible and convenient health and welfare programs and workplace accommodations. In response to the COVID-19 pandemic, the WarnerMedia Business consulted with medical professionals to institute policies that best protected its employees and provided for the healthiest workplace possible in order to continue production operations and critical business. The WarnerMedia Business prioritizes employee safety, by providing a comprehensive education campaign, a suite of systems designed to address unique COVID-19 health and wellness protocols, personal protective equipment, flexible scheduling or time-off options and implementing technologies to enhance the necessary remote-work environment. As the WarnerMedia Business looks to life and operations beyond the pandemic, the WarnerMedia Business is revising its business models to support a hybrid work environment and at-home productivity tools for many employees on a permanent basis.

Diversity and Inclusion

The WarnerMedia Business views equity and inclusion as both business and moral imperatives and its priority is to make equity and inclusion fundamental parts of its DNA, every day. The WarnerMedia Business leads with a systems-based approach, meaning that it focuses on intentionally identifying and dismantling structural, systemic barriers that perpetuate inequitable outcomes so it can guarantee the fair treatment, access, opportunity, and advancement for all. In turn, the WarnerMedia Business will be able to attract and retain a workforce that reflects the diversity of its audiences around the world. This approach allows the WarnerMedia Business to align its equity and inclusion and corporate social responsibility efforts towards a comprehensive and intentional strategy that addresses equity in the key areas of workforce and production, content, programs and community as recently highlighted in its 2020/2021 Equity & Inclusion Report. The WarnerMedia Business is inherently centered around people, so it will also supplement this approach with a deep focus on creating an inclusive environment in which all individuals and groups can be and feel welcomed, respected, supported, and valued to fully participate and bring their full, authentic selves to work.

Intellectual Property

The WarnerMedia Business creates, owns and distributes intellectual property, including copyrights, trademarks, patents, and domain names, as well as licenses the intellectual property of third parties. To protect its intellectual property, the WarnerMedia Business relies on a combination of laws and regulations and license agreements. Outside of the United States, laws and regulations relating to intellectual property protection and the

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effective enforcement of these laws and regulations vary greatly from country to country. The EC is pursuing legislative and regulatory initiatives which could impact the WarnerMedia Business’s activities in the European Union. Piracy, particularly of digital content, continues to threaten the WarnerMedia Business’s revenues from products and services, and the WarnerMedia Business works to limit that threat through a combination of approaches, including through enforcement, technological countermeasures and advocacy for legislative solutions.

Regulatory Environment

The WarnerMedia Business’s businesses are subject to and affected by laws and regulations of U.S. federal, state and local governmental authorities, as well as the laws and regulations of other countries and international bodies such as the United Kingdom and the European Union, including laws and regulations relating to intellectual property, as described above. These laws and regulations are subject to change.

The WarnerMedia Business’s businesses are subject to laws and regulations governing data privacy, data security and cybersecurity. For example, in the United States, the WarnerMedia Business is subject to: (1) CCPA and CPRA, which gives California residents broad rights to access, delete, and opt-out of the sale of their personal information; (2) the Children’s Online Privacy Protection Act (“COPPA”), which applies to certain of the WarnerMedia Business’s websites, mobile apps and other online business activities and restricts the collection, maintenance and use of personal information regarding children; (3) the Privacy and Security Rules under the Health Insurance Portability and Accountability Act, which imposes privacy and security requirements on the WarnerMedia Business’s health plans for its employees and on service providers under those plans; (4) the Video Privacy Protection Act, which restricts disclosure of personally identifiable video viewing information; (5) state statutes requiring data security controls and notice to individuals when personally identifiable information (“PII”) has been accessed or acquired in a data breach; and (6) privacy and security rules imposed by the payment card industry, as well as regulations designed to protect against identity theft and fraud in connection with the collection of credit and debit card payments from consumers. In the EU, for example, the WarnerMedia Business is subject to GDPR, which gives individuals broad rights to access, delete, and opt-out of the sale of their personal information.

The WarnerMedia Business’s businesses are also subject to a number of laws and regulations relating to the distribution and licensing of television programming, the content of and access to that programming, and advertising and marketing. In the United States, for example, cable networks and premium pay-TV services, either directly or indirectly through their distribution partners, are subject to various obligations under the Communications Act of 1934, as amended (the “Communications Act”), and related regulations issued by the FCC. These obligations and regulations, among other things, require closed captioning of programming for the hearing impaired, require certain content providers to make available audio descriptions of programming for the visually impaired, limit the amount and content of commercial matter that may be shown during programming aimed primarily at an audience of children aged 12 and under, and require the identification of (or the maintenance of lists of) sponsors of political advertising. In the EU, for example, there is a continually evolving regulatory environment capable of impacting the audiovisual sector and the WarnerMedia Business’s activities. This includes legislation such as GDPR, the Copyright Directive, the Audiovisual Media Services Directive and the proposed Digital Services Act.

Legal Proceedings

The WarnerMedia Business is, from time to time, subject to a variety of lawsuits, regulatory proceedings and other matters arising in the ordinary course of business. In view of the inherent difficulty of predicting the outcome of litigation and claims, the WarnerMedia Business often cannot predict what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss, fines or penalties related to each pending matter may be. An adverse outcome in one or more of these matters could be material to the WarnerMedia Business’s results of operations or cash flows for any

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particular reporting period. Based upon the experience of its management, current information and applicable law, the WarnerMedia Business does not believe that these proceedings and claims will have a material adverse effect on its financial position, results of operations or cash flows. See Note 20 to the Combined Financial Statements of the WarnerMedia Business.

Properties

The WarnerMedia Business has principal corporate offices located in New York, New York. The WarnerMedia Business owns or leases offices; studios; technical, production and warehouse spaces; communications facilities and other properties in numerous locations globally. Additional information with respect to the WarnerMedia Business’s property and equipment and leases is contained in Notes 8 and 9 to the Combined Financial Statements of the WarnerMedia Business.

The WarnerMedia Business’s principal sites include facilities which, in the opinion of its management, are suitable and adequate for their use and have sufficient capacity for its current business needs and expected near-term growth. No title examination of the properties has been made for the purpose of this proxy statement/prospectus.

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS OF DISCOVERY

AND THE WARNERMEDIA BUSINESS

On May 17, 2021, Discovery and Merger Sub entered into definitive agreements with AT&T and Spinco, pursuant to which, and subject to the terms and conditions therein, (1) AT&T will transfer the WarnerMedia Business to Spinco (the Separation), (2) Spinco will (a) make a cash distribution to AT&T equal to approximately $30.0 billion, subject to adjustment, including for the existing debt of the WarnerMedia Business to be assumed by the Spinco Group, net working capital and other adjustments (the Special Cash Payment) and (b)(i) issue to AT&T the Spinco Debt Securities that satisfy the Par Exchange Requirement, (ii) distribute to AT&T all or a portion of the cash proceeds from the borrowing by Spinco under the Spinco Financing Agreements and/or use all or a portion of the cash proceeds of such borrowing to purchase assets of the WarnerMedia Business from AT&T or (iii) undertake a combination of the actions described in (2)(b)(i) and (2)(b)(ii) such that AT&T has received, in the aggregate, the Additional Amount of approximately $13.0 billion, subject to adjustment, (3) AT&T will distribute to its stockholders all of the issued and outstanding shares of Spinco common stock in a distribution that will, at AT&T’s election, take place either by way of (i) a pro rata distribution of Spinco common stock to AT&T stockholders or (ii) an exchange offer followed by a pro rata distribution of any shares of Spinco common stock remaining if such exchange offer is not fully subscribed because the number of shares of AT&T common stock tendered and accepted does not result in all shares of Spinco common stock being distributed in the exchange offer (the Distribution), (4) Discovery will amend and restate the Discovery charter to reclassify and automatically convert each issued and outstanding share of Discovery Series A common stock, Discovery Series B common stock, Discovery Series C common stock, Discovery Series A-1 preferred stock and Discovery Series C-1 preferred stock into such number of shares of WBD common stock as set forth in the Merger Agreement (the Reclassification) and (5) Merger Sub will merge with and into Spinco, with Spinco as the surviving corporation (the Merger) and as a wholly owned subsidiary of Discovery. As a result of the Merger, the existing shares of Spinco common stock will automatically convert into the right to receive shares of WBD common stock. Immediately after the completion of the Merger, approximately 71% of the outstanding shares of WBD common stock on a fully diluted basis are expected to be held by holders of shares of Spinco common stock as of immediately prior to the Merger and approximately 29% of the outstanding shares of WBD common stock are expected to be held by holders of Discovery capital stock as of immediately prior to the Reclassification and the Merger.

The unaudited pro forma condensed combined financial statements presented below are derived from the historical consolidated financial statements of Discovery and the historical combined financial statements of the WarnerMedia Business. The unaudited pro forma condensed combined financial statements and the notes thereto have been prepared to illustrate the estimated effects of the Transactions in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses”. Release No. 33-10786 replaced the existing pro forma adjustment criteria with simplified requirements to depict the accounting for the transaction (“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). Discovery has elected not to present Management’s Adjustments and only presents Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial statements. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020 and the unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2021, combine the historical consolidated statements of operations of Discovery and the historical combined statements of operations of the WarnerMedia Business, giving effect to the Transactions as if they had occurred on January 1, 2020. The unaudited pro forma condensed combined balance sheet as of September 30, 2021 combines the historical consolidated balance sheet of Discovery and the historical combined balance sheet of the WarnerMedia Business, giving effect to the Transactions as if they had occurred on September 30, 2021. Refer to Note 1—Basis of Presentation for additional information.

The unaudited pro forma condensed combined financial statements should be read in conjunction with the historical financial statements of Discovery and the WarnerMedia Business referenced below:

•

Discovery’s audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2020, which are included in Discovery’s Annual Report on Form 10-K for the year

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ended December 31, 2020, filed on February 22, 2021, which is incorporated by reference into this proxy statement/prospectus;

•

Discovery’s unaudited consolidated financial statements and the notes thereto as of and for the nine months ended September 30, 2021, which are included in Discovery’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021, filed on November 3, 2021, which is incorporated by reference into this proxy statement/prospectus;

•

The WarnerMedia Business’s audited combined financial statements and the notes thereto as of and for the year ended December 31, 2020, and as of and for the nine months ended September 30, 2021, included elsewhere in this proxy statement/prospectus.

The historical combined financial statements of the WarnerMedia Business have been derived from the consolidated financial statements and accounting records of AT&T, as if the WarnerMedia Business’s operations had been conducted independently from those of AT&T. The combined financial statements of the WarnerMedia Business are presented on a “carve-out” basis in accordance with GAAP. The historical combined statements of operations include all revenues and costs directly attributable to the WarnerMedia Business, gains and losses on dispositions prior to the Transactions, as well as an allocation of expenses related to corporate finance, human resources, business development, legal, treasury, real estate, external affairs, compliance, and other shared services. Expenses that are specifically identifiable to the WarnerMedia Business are directly recorded to the combined statements of operations. The remaining expenses are primarily allocated on the basis of the relative percentage of expected revenue generated. The WarnerMedia Business considers these allocations to be a reasonable reflection of the utilization of services by, or the benefits provided to, the WarnerMedia Business. The historical combined balance sheets include all assets and liabilities that reside within the WarnerMedia Business legal entities. Assets and liabilities in shared entities were included in the historical combined balance sheets to the extent the asset or liability is primarily used by the WarnerMedia Business. Adjustments were made to certain assets and liabilities and associated depreciation or amortization for any specific assets or liabilities retained by AT&T and its affiliates (other than the WarnerMedia Business), subsidiaries sold or approved to be sold by AT&T and its affiliates (other than the WarnerMedia Business) prior to the Transactions, and the elimination of certain pension and post-retirement assets and obligations to be retained by AT&T based on specific identification. The allocations may not reflect the expenses the WarnerMedia Business would have incurred as a standalone entity for the periods presented. As a result, the combined financial statements may not be indicative of the WarnerMedia Business’s financial condition, results of operations or cash flows had it operated as a standalone entity during the periods presented, and the results stated in the combined financial statements are not indicative of the WarnerMedia Business’s future financial condition, results of operations or cash flows.

As part of a separate reporting segment of AT&T, the WarnerMedia Business has been able to receive services from AT&T. Following the Transactions, WBD will need to replace these services either by providing them internally from Discovery’s existing services or by obtaining them from unaffiliated third parties. These services include certain corporate level functions of which the effective and appropriate performance is critical to the operations of the WarnerMedia Business prior to the Merger and WBD following the Merger. While AT&T will provide certain services on a transitional basis pursuant to the TSA, the duration of such services is subject to ongoing discussions but will be for a reasonable term to be set out in the Services Schedule to the TSA. WBD may be unable to replace these services in a timely manner or on terms and conditions as favorable as those the WarnerMedia Business currently receives from AT&T. The costs for these services could in the aggregate be higher than the combination of Discovery’s current costs and those reflected in the historical combined financial statements of the WarnerMedia Business.

The unaudited pro forma condensed combined financial statements have been prepared using the acquisition method of accounting in accordance with ASC 805, Business Combinations, (“ASC 805”) with Discovery as the accounting acquirer of the WarnerMedia Business. In identifying Discovery as the accounting acquirer, Discovery’s conclusion is based primarily upon the following facts: (1) Discovery initiated the Transactions, will be the legal acquirer of Spinco, and will transfer equity consideration to Spinco stockholders, (2) AT&T will

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receive up to approximately $43.0 billion of consideration as part of its disposition of the WarnerMedia Business, (3) the current Chief Executive Officer of Discovery will continue as Chief Executive Officer of WBD for a substantial period of time after the Transactions and will be primarily responsible for appointing the rest of the executive management team of WBD, (4) no stockholder or group of stockholders will hold a controlling interest in WBD after the completion of the Transactions and a key Discovery stockholder is expected to have the largest minority interest in WBD, and (5) AT&T will have no input on the strategic direction and management of WBD after the completion of the Transactions. The above facts are deemed to outweigh the fact that the holders of shares of Spinco common stock that receive shares of WBD common stock in the Merger will in the aggregate own a majority of WBD common stock on a fully diluted basis and associated voting rights after the Merger.

The pro forma purchase price allocation of the WarnerMedia Business’s assets acquired and liabilities assumed is based on preliminary estimates of the fair values of the assets acquired and liabilities assumed, and the unaudited pro forma condensed combined financial statements are based upon available information and certain assumptions of Discovery management as of the date of this proxy statement/prospectus. The completion of the valuation, accounting for the Transactions and the allocation of the purchase price may be different than that of the amounts reflected in the pro forma purchase price allocation, and any differences could be material. Such differences could affect the purchase price and allocation of the purchase price, which may affect the value assigned to the tangible or intangible assets and amount of depreciation and amortization expense recorded in the unaudited pro forma condensed combined statements of operations.

The unaudited pro forma adjustments represent Discovery management’s estimates based on information available as of the date of this proxy statement/prospectus and are subject to change as additional information becomes available and analyses are performed. However, Discovery management believes that the assumptions provide a reasonable basis for presenting the significant effects of the Transactions as contemplated, and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial statements. Transaction Accounting Adjustments are intended to represent the necessary adjustments to account for the Transactions.

The unaudited pro forma condensed combined financial statements do not give effect to the potential impact of current financial conditions, or any anticipated revenue enhancements, cost savings or operating synergies that may result from the Merger. No Management Adjustments related to forward-looking information were included in the unaudited pro forma condensed combined financial statements and accompanying explanatory notes.

The unaudited pro forma condensed combined financial statements are presented for informational purposes only and are not necessarily indicative of the financial position or results that would have occurred had the events been consummated as of the dates indicated, nor are they indicative of any future results. See “Risk Factors” for additional discussion of risk factors associated with the unaudited pro forma condensed combined financial statements.

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UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

SEPTEMBER 30, 2021

(In millions)


	Historical				Transaction Accounting Adjustments
	Discovery		WarnerMedia Business after Reclassification Adjustments (Note 2)		Pre-Merger Adjustments (Note 3)			Merger Adjustments			Notes		Pro Forma Combined
ASSETS
Current assets:
Cash and cash equivalents	$	3,116	$	2,335	$	4,057		$	—				$	9,508
Receivables, net		2,462		4,745		—			(61	)		6b		7,146
Content rights and prepaid license fees, net		254		—		—			—					254
Prepaid expenses and other current assets		824		1,686		(9	)		—					2,501

Total current assets		6,656		8,766		4,048			(61	)				19,409
Film and television library, net		3,688		21,985		—			1,035			5		26,708
Property and equipment, net		1,310		4,148		—			(121	)		5		5,337
Goodwill		12,957		39,706		—			(17,121	)		5		35,542
Intangible assets, net		6,784		37,113		—			18,406			5		62,303
Other noncurrent assets		2,923		6,907		—			(357	)		5, 6d		9,473

Total assets	$	34,318	$	118,625	$	4,048		$	1,781				$	158,772

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	2,361	$	9,139	$	—		$	204			5, 6a, 6b, 6d, 6e, 6f	$	11,704
Deferred revenues		625		1,322		—			(25	)		6b		1,922
Current portion of debt		349		13		—			—					362

Total current liabilities		3,335		10,474		—			179					13,988
Noncurrent portion of debt		14,436		1,721		41,319			285			5		57,761
Deferred income taxes