The creation and expansion of Time Warner

By the time Ross and Nicholas began their merger talks, Time was the third largest cable operator in the country, including its 23% stake in Turner Broadcasting System. Despite initiating talks in late 1987, the merger that created Time Warner remained incomplete until 1989, in part because Time executives delayed the merger until official investigations into the financial scandals of both WCI and Ross were cleared up. Ross shared CEO duties until early 1991 when Nicholas left the company. Ross died in December 1992, and Gerald (Jerry) Levin became CEO of Time Warner Inc.

Throughout the 1990s, Time Warner expanded into new markets, including a Spanish-language version of People and a children’s edition of Time. The WB, a broadcast television network founded by Time Warner, first aired in January 1995.

In 1996, the company acquired the outstanding shares of Turner Broadcasting System, which added not only cable television operations, such as CNN, TNT, and Cartoon Network, and the Warner Bros. film archive but the Atlanta Braves and Atlanta Hawks sports teams as well. In late 1999 Time Warner began merger talks with America Online, Inc. (AOL).

AOL’s rise and merger with Time Warner

AOL’s roots start in 1982 when Control Video Corporation of Dulles, Virginia, initially offered online services to users of Apple II and Commodore 64 computers. In 1985, the company became Quantum Computer Services Inc. (QCS). America Online began as a special QCS service dedicated to users of the Apple Macintosh computer.

In 1991, QCS named Steve Case president, then its CEO. That year the company changed its name to America Online. It had 150,000 subscribers and $20 million in annual revenue. AOL became a public company in 1992. In 1993 the company rejected an informal $268 million acquisition offer from the Microsoft Corporation.

In 1994, AOL launched an Internet division, and by the next year it was the leading Internet service provider. AOL surpassed 10 million subscribers in 1997 and the next year acquired CompuServe, its top competitor, along with its 2.6 million members. That year more messages were exchanged over AOL every day than were delivered by the U.S. Postal Service.

In January 2000, merger talks between Case and Levin were announced. Later that year, AOL reached 27 million subscribers. The $106 billion merger between AOL and Time Warner didn’t receive final shareholder and regulatory approval until January 2001. Case was named chairman of AOL Time Warner Inc., and Levin became CEO. That summer AOL’s membership cleared the 30 million mark.

In 2002, AOL Time Warner reported the largest quarterly loss ever for a U.S. company, $54.24 billion, following the collapse of the Internet stock market as investors pulled out of stocks with too much emphasis on Internet content or services. In 2003, under the direction of CEO Richard Parsons, the company changed its name back to Time Warner Inc. In 2009, it formally split with AOL, which became an independent company.

WarnerMedia and AT&T’s media ambitions

In 2016, AT&T agreed to acquire Time Warner for $85 billion. The deal required federal regulatory review, and in 2017 the U.S. Department of Justice sued to block the sale, citing antitrust issues. The following year a judge approved the merger, and the deal was finalized shortly thereafter, though the Justice Department appealed the decision. Time Warner was subsequently renamed WarnerMedia.

Formation of Warner Bros. Discovery

In April 2022, AT&T completed the spin-off of WarnerMedia, which was then merged with Discovery Inc. to form Warner Bros. Discovery. The deal combined WarnerMedia divisions such as HBO, CNN, and Warner Bros. Pictures with Discovery’s group of cable networks, including Discovery Channel, TLC, and Animal Planet. David Zaslav, then CEO of Discovery, was named chief executive of the new company.

The intent of the merger was to strengthen the company’s streaming business by combining original content with a broad lineup of established cable channels and international distribution networks, in an effort to compete more effectively with companies like Netflix and Disney. Warner Bros. Discovery began trading on the Nasdaq under the ticker symbol WBD on April 11, 2022.

Planned split of Warner Bros. Discovery

In June 2025, Warner Bros. Discovery unveiled a major corporate restructuring aimed at separating the company into two independent businesses, subject to board approval. The decision followed mounting investor pressure after the company lost nearly half its market value since its formation three years before.

The plan calls for splitting the company into two:

• Streaming and Studios. Comprising Warner Bros. Motion Picture Group, Warner Bros. Television, DC Studios, HBO, and the HBO Max streaming service, this entity would focus on digital content and direct-to-consumer services and be led by Warner Bros. Discovery CEO David Zaslav.
• Global Networks. Focused on cable, this business would oversee CNN, TNT Sports, Discovery’s cable networks, free-to-air channels in Europe, and digital properties such as Discovery+ and Bleacher Report. Its head would be Gunnar Wiedenfels, Warner Bros. Discovery’s chief financial officer.

The move to divide the company followed years of pressure from cord-cutting, as viewers increasingly shifted from traditional television to streaming services such as Netflix, Amazon, Disney+, and HBO Max.

Warner Bros. Discovery’s restructuring is similar to efforts by competitors such as Comcast (CMCSA), which spun off its television division in 2024.

References

Clive Hirschhorn, The Warner Bros. Story (1979, reissued 1986), is a large-format book full of photos of Warner movie stars. Here’s Looking At You, Warner Bros. (1993), narrated by Clint Eastwood, Barbra Streisand, and others, is a lively, if self-serving, video history of the movie studio. Robert E. Herzstein, Henry R. Luce: A Political Portrait of the Man Who Created the American Century (1994), stresses Luce’s role as a molder of political opinion in the United States. Connie Bruck, Master of the Game: Steve Ross and the Creation of Time Warner (1994), is a flattering biography of Ross that does not overlook his failings as a businessman, including his financial scandals. Richard M. Clurman, To The End Of Time: The Seduction and Conquest of a Media Empire (1992), is a critical look at how Time Inc. executives profited from the sale of the company to Warner Communications. Kara Swisher, AOL.com: How Steve Case Beat Bill Gates, Nailed the Netheads and Made Millions in the War for the Web, updated ed. (1999), is an account of AOL’s rise that looks closely at the personalities behind the company and the competition with Microsoft.