AT&T’s New Purchase One Of Biggest Media Deals In History
It seems that AT&T isn’t satisfied with its current telecommunications services as it made a new deal to acquire Time Warner late Saturday night. While many were focusing on the Internet hacking that took place on Friday, there were some rumblings late Friday that the telecommunications company was in the process of buying Time Warner.
The deal is now confirmed as AT&T is picking up Time Warner at 107.5 per share but the real question is what will it do to the current media landscape?
First and foremost, this will give AT&T an entry into a whole new realm of business opportunities. These areas that AT&T will be apart of now include entertainment, sports and news. Some of the big entities that are a part of the deal include specific content shows such as Anderson Cooper’s 360 on CNN, “Game Of Thrones” on HBO and March Madness aired by several Turner cable channels. The deal will also include Warner Bros and DC Comics.
While some of these entities may not seem important enough there are others such as HBO that is a juggernaut. While HBO may have to deal with competition from Netflix and Amazon Prime, it is still one of the best when it comes to creating original content and it has two streaming services in HBO GO, used with cable subscriptions, and HBO Now which is a separate streaming service. Which means there could possibly be special deals served to AT&T customers regarding some of these properties.
“There’s more video going on mobile,” Jeff Bewkes, Time Warner Chief Executive, said to The Wall Street Journal. “That’s why AT&T with its scale is such a great home for our content.”
Part of this new entry is it helps AT&T address the fact that there hasn’t been much growth for the company. With Verizon, Sprint and T-Mobile, the wireless market has gone beyond crowded and acquisitions seem scarce in that area. This new deal will give AT&T better opportunities for it’s shareholders in the above industries of sports, entertainment and film. AT&T has already made some headway into the content market by purchasing DirectTV, which has the NFL Sunday Ticket. Having one of the best entertainment shows around in “Game Of Thrones” isn’t going to hurt the company’s bottom line.
The second and more important part is it helps keep Time Warner, which has had an offer from 21st Century Fox at $85 a share—something that Bewkes turned down—from competitors such as Verizon. Verizon recently purchased Yahoo but has since had some issues due to Yahoo’s hacking incident. It previously bought AOL from Time Warner some years back.
So what does this mean for the media landscape?
This is the most ambitious merger in the history of media. The second was the Comcast-NBC Universal deal back in 2011. With that being said, there is a chance that regulators may not allow this new deal to go through. In 2011, regulators weren’t too keen on the Comcast-NBC deal. If the deal were to go through, there are bound to be a lot of conditions placed on the new merger. It also means that AT&T has taken a player off the board as there aren’t a lot of content media companies available.
“HBO, Turner and Warner Bros. are really good assets for a future of nonlinear consumption,” one analyst told The Wall Street Journal, before the deal took place. The same analyst said that other content only companies such as those with Disney or 21st Century Fox will be harder to purchase due to expensiveness.
Pending the approval of the deal, it looks like AT&T’s deal is going to pave the way for how media companies survive in this new era of technology.
