Clearly the board members of AT&T and Time Warner have been locked together in a mysterious board room today based on this evening’s announcement that AT&T will be aggressively expanding beyond wireless and broadband (and telephone) as it jumps right into the programming and content world with the $85 billion purchase of Time Warner.
Time Warner, the parent company of such major programming entities as CNN, TNT, HBO and numerous other channels and websites (which means that AT&T will now own Game of Thrones—maybe that was the driving force?) is a significant player in the content arena, which means that this purchase will make AT&T Time Warner a marriage of programming and distribution, owning the pipe and the flow. Seems somewhat anticompetitive to me.
AT&T will pay $107.50 a share. Including TW’s debt, this deal is really valued at $109 billion—with a “b.” In a move noting that a good defense is a good offense, this deal will keep TW away from the hands of Verizon, Apple and Comcast, but will also require a lengthy and complicated regulatory review. Interesting timing as we will be faced with a new administration in just a few short months.Memories of the Comcast–NBC merger are coming to mind. While the process was lengthy for that deal, it ultimately was approved with some conditions.
The question also is whether this deal will start another wave of consolidation among other carriers and content providers, and whether it will further increase the cost of valuable programming for consumers in rural America–with costs that have already accelerated beyond a reasonable level.