Two of the biggest companies in their respective areas, AT&T and Time Warner, are used to doing big things, but nothing like the $85 billion deal that was recently announced. That’s right folks. AT&T is acquiring Time Warner, whose assets include CNN, HBO, TBS, TNT, Warner Bros., and Cartoon Network.
AT&T hopes to become a leader in the media business by providing more ways to provide media coverage on mobile, a more accessible platform. They want to have skin in the game that not even their top rival, Verizon (more on them later) has.
One of Many
The acquisition of Time Warner is unique in a sense, but not entirely. Here is a list of some similar recent deals:
- Comcast and NBC
- Verizon and AOL
- Verizon and Yahoo!
Note that Verizon is involved in 2 out of 3 of those acquisitions. Verizon has been very aggressive in maintaining their reputation for stock market stability. However, some say that the risks are too great in both since AOL and Yahoo’s collective popularity is decreasing. Furthermore, an advantage that AT&T has over Verizon is that Time Warner’s assets are far greater than AOL or Yahoo! which could make the deal more stable.
What the AT&T Move Could Mean for You
Assuming the government review goes well, the culprits of the deal claim that AT&T users should not expect any increase in their prices as a result of this acquisition. Instead, they say, users will at some point watch their favorite Time Warner shows from their phones. This is the ultimate goal: to attract the increasing number of users that don’t buy cable and watch their favorite programs via Netflix or Hulu. While such an opportunity probably won’t be for years, the fact that such an ambition is in the making certainly reflects the direction that the television content and distribution business is heading.