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How much content is enough?

All signs point to a significant escalation in the streaming wars after AT&T (T) and Discovery (DISCA) announced plans to combine two massive content catalogs.

What’s happening: AT&T’s WarnerMedia division, which includes CNN, will be spun off and combined with Discovery in a new standalone media company, reports my CNN Business colleague Brian Stelter.

AT&T’s shareholders would get the majority of stock in the combined company, at 71%, while Discovery’s shareholders would get 29%. Discovery CEO David Zaslav will run the business, but executives from both companies will be in “key leadership roles” according to a press release.

The assets: WarnerMedia properties include HBO, CNN, HLN, Cartoon Network, Cinemax, TCM, Turner Sports, TNT, TBS, and the Warner Bros movie studio.

Discovery Communications is the corporate home for Discovery Channel, HGTV, Food Network, TLC, Animal Planet, MotorTrend, Travel Channel, the Oprah Winfrey Network and Eurosport.

But this is not a merger of equals. Discovery, which saw its share price skyrocket and then crash earlier this year during the Archegos Capital snafu, has a market value of roughly $30 billion including debt.

Time Warner (which became WarnerMedia), for comparison, was valued at $108.7 billion (including debt) in 2018 when it was bought by AT&T.

The deal with Discovery will allow AT&T to focus on its telecom business. It also gives WarnerMedia and Discovery more of the scale they need to compete with streaming giants Disney and Netflix.

The numbers: HBO and HBO Max, the streaming service from AT&T, have roughly 44 million subscribers in the United States, and another 20 million in other markets. Discovery has 15 million paying direct to consumer subscribers, driven primarily by its Discovery+ streaming service.

But Netflix now has 208 million subscribers globally, while Disney’s streaming service has nearly 104 million subscribers. In order words, they have a clear lead over HBO Max.

If antitrust regulators sign off on the deal, WarnerMedia and Discovery may be better equipped to compete. Zaslav said as much in an interview with CNBC last December.

“Within the next two years, it’s going to be put up or shut up for all of us,” he said. “Can you show you’re scaling? Are you going to be a player in the US? Are you going to be a player around the world?”

He predicted consolidation: “I think ultimately a lot of those companies are going to realize, ‘I don’t have enough.’ And then they’re going to say, ‘Who can we merge with or who can we do a deal with? And if we put together our [intellectual property], maybe we can compete with Disney.’”

The thinking is the same at AT&T. CEO John Stankey said in a note to staff on Monday that there was virtually no overlap in the creative and content capabilities at WarnerMedia and Discovery.

“We are now in a world where relevance and future success will be tied to greater scale and growth globally,” he said.

Shares in Discovery were up 17% in premarket trade. AT&T stock was up 1%.

Elon Musk is toying with bitcoin

Noted bitcoin Svengali Elon Musk is up to his old tricks.

The Tesla CEO sent bitcoin prices on a wild ride over the weekend by appearing to suggest on Twitter that the carmaker had sold holdings of the digital currency, before clarifying that it had not.

My CNN Business colleague Michelle Toh tracked the price action and parsed Musk’s cryptic statements here. The tweet that sparked the whole episode consisted of a single word: “indeed.”

Remember: Musk’s posts came just days after he caused another stir by announcing that Tesla would reverse plans to accept bitcoin as payment for its cars. He cited bitcoin’s high environmental cost as reason for the move.

If you’re confused about what Musk’s up to, you’re not alone (boredom is one potential explanation).

But investors should know: Regardless of his motivation, recent events have demonstrated that Musk has huge influence over the price of bitcoin and other cryptocurrencies. Buyer, beware …

Last call for taxes

Monday is the official deadline for Americans to file their 2020 federal tax return, and in most instances their state tax return, too.

It’s a month later than usual, thanks to the pandemic. But the filing deadline’s not the only thing that’s changed. Many of the upheavals over the past year have caused other changes to your taxes.

Due to the Covid crisis, there are plenty of new and revised provisions and important dates you will need to know about before filing your return this year.

We’re confident that most Before the Bell readers will have already filed. But my CNN Business colleague Jeanne Sahadi has the complete rundown of everything you need to know, including when to expect refunds.

Up next

Hostess Brands reports earnings before the open.

Also today:

  • Tencent Music and Fisker report after the closing bell.

Coming tomorrow: Earnings from Home Depot and Walmart.