AT&T-Time Warner may signal start of new media

Regolare Commento Stampare

NK UK, London [U.K.], October 23: Telecom giant AT and T has agreed to pay United States dollars 85 billion to buy media powerhouse Time Warner and create one of the world's largest media, TV and telecom firms.

The deal was agreed at a meeting of the two boards on Saturday but will still need to be approved by regulators.

The deal would set a milestone in the converging media and telecommunications sectors and unleash a far-reaching reordering of the industry as rivals are spurred to attempt their own deals, it said. Speaking in Gettysburg, Pennsylvania, GOP presidential nominee Donald Trump vowed to kill it if elected because it concentrates too much "power in the hands of too few".

The tie-up of the two media giants, together worth over $300bn in market value, is certain to face tough scrutiny from anti-trust regulators because of potential ripple effects across media platforms. USA regulators will insist on significant conditions as part of any approval that would limit the synergies from any deal, they said, noting that in 2011 Comcast was forced to give up day-to-day control of video website Hulu in order to buy NBC, and that it had to make NBC programs available to other streaming services.

Owning more content gives cable and telecom companies bargaining leverage with other content companies as customers demand smaller, hand-picked cable offerings or switch to watching online.

Rich Tullo, research director of Albert Fried & Company said, "We think 5G mobile is coming, we think 5G mobile is an epic game-changer". In turn, Time Warner pledged to pay $1.7 billion penalty to AT&T if someone outbids its offer. In addition to the Comcast-NBC Universal deal, Verizon bought AOL a year ago and has now proposed a deal for Yahoo to build a digital-ad business.

Time Warner's older major deal in 2001 - where it sold itself to AOL at the peak of the dot-com boom - has been considered a big disaster by analysts. Dallas-based AT&T and New York-based Time Warner declined to comment.

"My senior management team and I are looking forward to working closely with Randall and our new colleagues as we begin to capture the tremendous opportunities this creates to make our content even more powerful, engaging and valuable for global audiences", Bewkes added. "Time Warner, we believe, is the clear leader in premium content". Time Warner Cable, the spun-off business, was acquired by Charter Communications past year for $56 billion.

Andre Barlow, an antitrust lawyer at the law firm Doyle, Barlow and Mazard, said the government may worry about whether other cable and internet companies would continue to have access to Time Warner content like HBO and CNN. Other entities, he said, made more sense for the always-a-bridesmaid Time Warner.

Time Warner rose almost 8 per cent on Friday, and is now up 38 per cent since the start of the year. Growth and power. The constant connectivity provided by the likes of AT&T is powerful and profitable, but so is content.