AT&T completes mega merger with Time Warner

[Shawn Knight]

What just happened? AT&T announced intentions to purchase Time Warner in late 2016 but the merger got held up in court by the Department of Justice which sued to block the deal. A judge earlier this week ruled that the transaction could proceed, giving the two sides the green light to seal the deal.

AT&T has officially completed its landmark acquisition of Time Warner, further blurring the lines between media, entertainment and technology.

With the acquisition, AT&T is larger than ever although by segmenting the business into four parts, each unit will be able to operate independently and move quickly.

• AT&T Communications provides mobile, broadband, video and other communications services to U.S.-based consumers and nearly 3.5 million companies – from the smallest business to nearly all the Fortune 1000 – with highly secure, smart solutions. Revenues from these services totaled more than $150 billion in 2017.
• AT&T’s media business consists of HBO, Turner and Warner Bros. Together, these businesses had revenues of more than $31 billion in 2017. A new name for this business will be announced later.
• AT&T International provides mobile services in Mexico to consumers and businesses, plus pay-TV service across 11 countries in South America and the Caribbean. It had revenues of more than $8 billion in 2017.
• AT&T’s advertising and analytics business provides marketers with advanced advertising solutions using valuable customer insights from AT&T’s TV, mobile and broadband services, combined with extensive ad inventory from Turner and AT&T’s pay-TV services. A name for this company will be announced in the future.

John Donovan will serve as CEO of AT&T Communications with John Stankey leading the helm of AT&T’s media business. Lori Lee is getting the nod as chief of AT&T International and global marketing officer of AT&T Inc. while Brian Lesser will run the company’s ad and analytics business.

AT&T Chairman and CEO Randall Stephenson said they are going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors and advertisers.

As per the terms of the merger, Time Warner shareholders will receive 1.4 shares of AT&T common stock as well as $53.75 in cash per share of Time Warner owned.

Image courtesy Shutterstock

Permalink to story.

https://www.techspot.com/news/75110-att-completes-mega-merger-time-warner.html

 

[Reachable]

I don't hear anybody clapping.

 

[MilwaukeeMike]

As much as I prefer there to be more companies out there competing for our business I don't think there's anything wrong with this merger. Trump was wrong to try to block it - it's not going to be a monopoly. There are still other cable providers - like Comcast and Charter - and you could argue that in the market of content consumption (not just 'cable') the entire idea of cable is on it's way out as cable cutters have been moving to online services.

ATT is now going to own both the content creation (like HBO) and the distribution (like DirectTV) - this means they could charge Charter (Spectrum) or Comcast customers more for HBO. Or... they could give you HBO Go for free if you're a Directv customer.... who knows.

Another thing to note: This is bad for anyone who wants to build their own cable package a-la-carte. This merger will encourage more bundling of content and services because more stuff is now owned by ATT.

I'm curious as to how this will turn out.

To put it in perspective - ATT is worth about 203 billion today while Time Warner is at 77 Billion. Together that's 280 Billion in value for them. Amazon is at $843 billion, Google is $802 billion, Netflix is $170 Billion, Facebook is $566 billion and of course Apple is $928 billion.

As big as ATT will be - they're only half as valuable as Facebook, and not even close to Amazon or Google or Microsoft ($770b)

 

[psycros]

And without missing a beat their now trying to buy Fox. Anyone who thinks this is good for consumers hasn't been paying ANY attention to what Disney and Comcast have done over the past decade (clue: it's NOT helping consumers).

 

[Uncle Al]

Bend over, it's coming to an orifice near you very soon .... coated with sand!

 

[captaincranky]

Bend over, it's coming to an orifice near you very soon .... coated with sand!

Perhaps so, buy one has to "assume", they'll be mixing the sand into some "Vaseline", for your viewing pleasure, of course....

The thing to keep your eye on, (so to speak), is whether or not AT&T tenders an offer for Chesebrough-Ponds. If they don't, you'll likely be getting a Chinese substitute grease, and only god knows what carcinogens that might contain.

 

[Evernessince]

As much as I prefer there to be more companies out there competing for our business I don't think there's anything wrong with this merger. Trump was wrong to try to block it - it's not going to be a monopoly. There are still other cable providers - like Comcast and Charter - and you could argue that in the market of content consumption (not just 'cable') the entire idea of cable is on it's way out as cable cutters have been moving to online services.

ATT is now going to own both the content creation (like HBO) and the distribution (like DirectTV) - this means they could charge Charter (Spectrum) or Comcast customers more for HBO. Or... they could give you HBO Go for free if you're a Directv customer.... who knows.

Another thing to note: This is bad for anyone who wants to build their own cable package a-la-carte. This merger will encourage more bundling of content and services because more stuff is now owned by ATT.

I'm curious as to how this will turn out.

To put it in perspective - ATT is worth about 203 billion today while Time Warner is at 77 Billion. Together that's 280 Billion in value for them. Amazon is at $843 billion, Google is $802 billion, Netflix is $170 Billion, Facebook is $566 billion and of course Apple is $928 billion.

As big as ATT will be - they're only half as valuable as Facebook, and not even close to Amazon or Google or Microsoft ($770b)

Nowadays companies don't need to be textbook monopolies to control the market. Companies like Intel and Comcast found that out long ago. Control a majority of the market and either bribe, threaten, or sue to keep competitors out.

The result of this merger should be clear from the onset. It reduces competition and thus is not good for consumers. That's the way a capitalist economy works. Remove the competition and it's the worst economic system.

 

[MilwaukeeMike]

Nowadays companies don't need to be textbook monopolies to control the market. Companies like Intel and Comcast found that out long ago. Control a majority of the market and either bribe, threaten, or sue to keep competitors out.

The result of this merger should be clear from the onset. It reduces competition and thus is not good for consumers. That's the way a capitalist economy works. Remove the competition and it's the worst economic system.

I think you're confusing monopoly with 'niche'.

And 'reducing competition' is not the reason to stop a merger... A merger gets stopped when consumers have too few choices. This merger didn't reduce choices.

Also - don't assume that when companies merge they become better. Companies are like people... they have culture and personalities - and you can't just marry two of them based on what looks good on paper and expect everything to work out fine. The phrase 'That's not how we do it here' is going to be said a LOT in the near future. It's normal for a merger to fail. Honestly - the most excited about this right now are probably ATT's direct competitors. Because now ATT has to deal with pulling off this merger.

 

[Evernessince]

I think you're confusing monopoly with 'niche'.

And 'reducing competition' is not the reason to stop a merger... A merger gets stopped when consumers have too few choices. This merger didn't reduce choices.

Also - don't assume that when companies merge they become better. Companies are like people... they have culture and personalities - and you can't just marry two of them based on what looks good on paper and expect everything to work out fine. The phrase 'That's not how we do it here' is going to be said a LOT in the near future. It's normal for a merger to fail. Honestly - the most excited about this right now are probably ATT's direct competitors. Because now ATT has to deal with pulling off this merger.

"A merger gets stopped when consumers have too few choices. This merger didn't reduce choices."

Um, that's exactly what it does. More media in the hands of one company. It's exactly because of mega-mergers like this that Netflix, Amazon, and other online services started marking their own shows.

 

[MilwaukeeMike]

"A merger gets stopped when consumers have too few choices. This merger didn't reduce choices."

Um, that's exactly what it does. More media in the hands of one company. It's exactly because of mega-mergers like this that Netflix, Amazon, and other online services started marking their own shows.

And perhaps Netflix and Amazon making their own shows is what made ATT buy Time Warner. Netflix both owns and distributes it's own shows. Now that ATT has bought Time Warner they now own a bunch of shows that they can distribute.

As far as choices go... we still have the same choices for Cable. However - now HBO might be free for ATT customers and not free for Spectrum (as I think it is today). And one thing I really don't think will ever happen - Game of Thrones will never be on Netflix. (Although I really doubt it would ever have been anyway - not when HBO has their own charging service)

 

[captaincranky]

And perhaps Netflix and Amazon making their own shows is what made ATT buy Time Warner. Netflix both owns and distributes it's own shows. Now that ATT has bought Time Warner they now own a bunch of shows that they can distribute....[ ]...)

Oh goody, now this thread has devolved into a "chicken or the egg" paradox.

 

[MilwaukeeMike]

Oh goody, now this thread has devolved into a "chicken or the egg" paradox.

No, it's more of a 'They get to have their cake (video content) and eat it (distribute it) too... why can't I?' And so they did. Netflix wasn't the first... The first case I can think of is when Disney bought Pixar. Pixar made movies, Disney distributed them. That's pretty close to this ATT/Time Warner situation. Not quite the same, but similar.

 

[captaincranky]

No, it's more of a 'They get to have their cake (video content) and eat it (distribute it) too... why can't I?' And so they did. Netflix wasn't the first... The first case I can think of is when Disney bought Pixar. Pixar made movies, Disney distributed them. That's pretty close to this ATT/Time Warner situation. Not quite the same, but similar.

Maybe but, when you apply your logic direrctly to the issue, it comes out as did they initiate the merger because other parties already had it, or because they simply wanted it for themselves, it surely does provide plausible deniability to their motivation.

What would be interesting is to go back and examine how studios got their movies to theaters, way back in the days of stars being under contract to said studios. You know, the old names, Warner Brothers, Paramount and the like.

Sony was in court winning the right for private citizens to use video tape to record "content".

Now, as Sony increases its stranglehold on the conception, production, distribution, and enforcement of copyright aspects of the movie industry, I can't picture then going to court to allow the reproduction of their material by any means whatsoever, nor can I picture any aspect of "niche," or, "monopolistic" behaviors, having any benefit to the consumer whatsoever.

It does provide money making opportunities for grabbing more profits, seeings as they, (AT & T or Sony, or whomever), automatically become their own, "middlemen", so to speak.

But, reproduction of copyrighted was A-OK in Sony's mind, when it was only concerned with making money off of selling video tape recorders.