AT&T Announces Plans to Buy Time Warner

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AT&T over the weekend revealed plans to purchase Time Warner Inc. in a deal valued at more than $85 billion, driving down both of their stocks and drawing comment from the Clinton and Trump presidential campaigns.

The $107.50 per share deal, if it passes regulatory muster, will provide AT&T with a broad array of high-value content from the world’s largest film/TV studio, which the network operator could deliver over its various networks and to an array of customer endpoints. That includes content from HBO, including Game of Thrones, Silicon Valley, True Detective, Veep, and much more. Time Warner also owns the Turner TV properties, which includes Cartoon Network/Adult Swim, CNN, TBS, and TNT; rights to March Madness, MLB, and NBA; and digital and over-the-top brands including Bleacher Report, CNN.com, Fandago, and Hulu. Warner Bros. is also part of the Time Warner family and includes entertainment television (such as Big Bang Theory), feature films (including the DC Comics and Harry Potter series), home video, and videogame businesses.

“Premium content always wins,” commented AT&T Chairman and CEO Randall Stephenson. “It has been true on the big screen, the TV screen, and now it’s proving true on the mobile screen. We’ll have the world’s best premium content with the networks to deliver it to every screen. A big customer pain point is paying for content once but not being able to access it on any device, anywhere. Our goal is to solve that.”

For its part, AT&T has wireline and wireless networks that deliver data, telephone, and video services in the U.S.; a mobile network in Mexico; and TV assets in Latin America. The company notes that it expects to use its technological experience and vast resources to do analysis in an effort to provide more relevant content to customers and introduce new business models, including ad-supported content.

Stocks of both companies dropped following the announcement of their planned combination – with AT&T’s down 2 percent and Time Warner’s falling off 3 percent. Meanwhile, both Clinton and Trump camps expressed concern that the pairing of these two media giants will provide the resulting company with too much power and lead to less competition.

Despite such concerns, however, combinations of giant content companies and network operators seem to be a growing trend. Comcast and NBC came together in 2011, Verizon and AOL joined forces in 2015, and Verizon earlier this year announced plans to buy Yahoo.




Edited by Alicia Young
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Executive Editor, TMC

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