{"id":69622,"date":"2016-10-24T20:21:53","date_gmt":"2016-10-24T12:21:53","guid":{"rendered":"https:\/\/wp-productionenv-bjg9h2g2bgg5b8aa.southeastasia-01.azurewebsites.net\/news\/att-to-buy-time-warner-touts-synergies-and-vertical-integration-2\/"},"modified":"2016-10-24T20:21:53","modified_gmt":"2016-10-24T12:21:53","slug":"att-to-buy-time-warner-touts-synergies-and-vertical-integration-2","status":"publish","type":"post","link":"https:\/\/starpath.global\/news\/att-to-buy-time-warner-touts-synergies-and-vertical-integration-2\/","title":{"rendered":"AT&T to Buy Time Warner, Touts Synergies and Vertical Integration"},"content":{"rendered":"<\/p>\n

[Via Satellite 10-24-2016] Just over a year after purchasing satellite pay-TV provider DirecTV<\/strong>, U.S. telco AT&T <\/strong>is making a move to acquire media and entertainment giant Time Warner Inc.<\/strong>, the companies announced yesterday. The total transaction value between Time Warner\u2019s $85.4 billion in equity value and accompanying debt is $108.7 billion, following which Time Warner would constitute about 15 percent of the combined company\u2019s revenues.<\/p>\n

Speaking on an Oct. 24 conference call, executives from AT&T and Time Warner emphasized the ability to leverage the unique strengths of each company together to provide services consumers are demanding, namely video everywhere, ahead of competitors.<\/p>\n

\u201c[The Time Warner purchase] fits well in terms of our own integration plans and I also think it fits well in terms of how fast this industry is moving,\u201d Randall Stephenson, chairman and CEO of AT&T said. \u201cThe convergence in terms of media and distribution is moving fast. We want to be at the front of it; we don\u2019t want to be chasing it, and doing this deal now allows us to lead this type of convergence activity.\u201d<\/p>\n

Jeff Bewkes, chairman and CEO of Time Warner, said AT&T\u2019s distribution capabilities would be an enormous opportunity for the company.<\/p>\n

\u201cWe need to go where the consumers are going, and that\u2019s increasingly mobile, increasingly multiplatform, and its increasingly on-demand,\u201d he said.<\/p>\n

AT&T\u2019s total subscribers in mobile, television and broadband reached 144 million, 45 million and 26 million respectively, according to a presentation given during the call. As a single company, AT&T and Time Warner envision being able to create new customer choices, gain better customer insights across TV, mobile and broadband and provide more personalized services.<\/p>\n

Should the merger gain regulatory approval, the impact particularly in North America could be substantial. In an Oct. 23 research note, Macquarie Capital <\/strong>cable, satellite and entertainment analyst Amy Yong wrote that the merger could reverberate across the media landscape.<\/p>\n

\u201cThe one-two punch of DirecTV-Time Warner puts AT&T in a unique position to disrupt the mobile video landscape,\u201d she wrote. \u201cWe believe their ability to address consumer demands and create catered bundles will be unmatched. The pending acquisition will force everyone to step up their game: Verizon <\/strong>may look to acquire other assets beyond AOL<\/strong>\u2013Yahoo <\/strong>while Comcast<\/strong>\/Charter <\/strong>could look to a wireless strategy more imminently. This could position T-Mobile<\/strong>, Sprint <\/strong>and Dish <\/strong>as attractive takeouts.\u201d<\/p>\n

Amid immediately palpable skepticism that regulators would block the deal, AT&T and Time Warner CEOs sought to assuage concerns that their companies would face challenges similar to other large media mergers in recent years. The executives described the acquisition as vertical rather than horizontal, meaning regulators should not be concerned about a loss of competition in the market as they have been with previous deals. Stephenson said the merger would likely come to fruition, but with regulatory strings attached.<\/p>\n

\u201cWe are convinced that these types of issues can be handled with conditions,\u201d he said.<\/p>\n

The U.S. Department of Justice<\/strong> must review the merger, and AT&T and Time Warner are in the process of figuring out which Federal Communications Commission <\/strong>(FCC) licenses, if any, will transfer to AT&T via the transaction.<\/p>\n

Stephenson said AT&T\u2019s integration of DirecTV continues to generate the synergies and sales opportunities the company anticipated. Since the acquisition in July 2015, DirecTV has gained 1.2 million additional subscribers. He said the timing of the Time Warner acquisition fits well with the integration of DirecTV. AT&T and Time Warner expect their transaction to close before the end of 2017.<\/p>\n

AT&T\u2019s purchase of Time Warner could also influence the company\u2019s soon to launch internet streaming service \u201cDirecTV Now.\u201d For the new service, AT&T is planning multiple content packages, including currently available DirecTV content, as well as premium add-on options for customers to view on internet-enabled devices. Stephenson cited the forthcoming Over-The-Top (OTT) video product as an example of where the merger would be very resourceful. DirecTV Now launches next month, and Stephenson said AT&T aspires to incorporate new abilities such as \u201cclipping content that you\u2019re watching and sharing it with your friends via messaging or via social media.\u201d Customers are demanding this ability, he said, but media providers have been less than eager to enable it.<\/p>\n

\u201cTrying to develop those capabilities with the current content providers is proving difficult. It\u2019s arms-length negotiation and people are obviously very protective of their content,\u201d said Stephenson.<\/p>\n

By teaming with content-rich partner Time Warner, Stephenson said AT&T could shed a lot of the difficulty in this process. Bewkes added that Time Warner has been trying to make Video on Demand (VOD) universal, but found that cable services and other distributors were slow to follow suite.<\/p>\n

\u201cIf we are iterating quickly into DirecTV Now with the Time Warner content, then we begin to differentiate the DirecTV Now platform as well,\u201d added Stephenson.<\/p>\n

This process would be significantly faster as a single unit than as partners, Stephenson said.<\/p>\n","protected":false},"excerpt":{"rendered":"

[Via Satellite 10-24-2016] Just over a year after purchasing satellite pay-TV provider DirecTV, U.S. telco AT&T is making a move to acquire media and entertainment giant Time Warner Inc., the companies announced yesterday. The total transaction value between Time Warner\u2019s $85.4 billion in equity value and accompanying debt is $108.7 billion, following which Time Warner […]<\/p>\n","protected":false},"author":1,"featured_media":69624,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[2],"tags":[],"class_list":["post-69622","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/69622"}],"collection":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/comments?post=69622"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/69622\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media\/69624"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=69622"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=69622"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=69622"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}