After a rough 20 month battle with the US Justice Department, AT&T has finally completed its acquisition of media giant Time Warner. The deal, valued at $85 billion, makes the carrier one of the largest media brands in the world with properties such as HBO, CNN, Warner Bros., Turner, Boomerang, and more. The news comes after a federal judge declared the merger could proceed.
“The content and creative talent at Warner Bros., HBO and Turner are first-rate. Combine all that with AT&T’s strengths in direct-to-consumer distribution, and we offer customers a differentiated, high-quality, mobile-first entertainment experience,” said Randall Stephenson, chairman and CEO of AT&T Inc. “We’re going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors and advertisers.”
Back in October of 2016, AT&T had initially filed to acquire Time Warner for $85 billion but was subject to regulatory approval, and then president-elect Donald Trump wasn’t a fan of the carrier obtaining so much power. However, as we learned this week, their efforts to block the purchase weren’t enough, with Assistant Attorney General Makan Delrahim remaining bitter about the court’s decision.
“We are disappointed with the Court’s decision today,” Assistant Attorney General Makan Delrahim said in a statement to the press. “We continue to believe that the pay-TV market will be less competitive and less innovative as a result of the proposed merger between AT&T and Time Warner. We will closely review the Court’s opinion and consider next steps in light of our commitment to preserving competition for the benefit of American consumers.”
While the market now remains notably less competitive, it makes AT&T one of the strongest players in the media industry with assets that even boil down to famed comic book character Batman.
With Time Warner now under their umbrella, AT&T has altered its company structure with four businesses that “operate independently and move quickly.” The four departments were broken down by their parent in a press release today.
- AT&T Communications provides mobile, broadband, video and other communications services to U.S.-based consumers and nearly 3.5 million companies – from the smallest business to nearly all the Fortune 1000 – with highly secure, smart solutions. Revenues from these services totaled more than $150 billion in 2017.
- AT&T’s media business consists of HBO, Turner and Warner Bros. Together, these businesses had revenues of more than $31 billion in 2017. A new name for this business will be announced later.
- AT&T International provides mobile services in Mexico to consumers and businesses, plus pay-TV service across 11 countries in South America and the Caribbean. It had revenues of more than $8 billion in 2017.
- AT&T’s advertising and analytics business provides marketers with advanced advertising solutions using valuable customer insights from AT&T’s TV, mobile and broadband services, combined with extensive ad inventory from Turner and AT&T’s pay-TV services. A name for this company will be announced in the future.
As for who will be leading each business, John Donovan will remain CEO of AT&T Communications, John Stankey will be CEO of AT&T’s media department, Lori Lee will be CEO of AT&T International and Global Marketing Officer at AT&T Inc., and Brian Lesser will be CEO of AT&T’s advertising and analytics business.
What does this all mean for the end consumer? Right now, things remain unclear as to what exact AT&T’s plans are, but our best guess would be better content streaming options for the carrier’s subscribers. As previously mentioned, Time Warner owns HBO, CNN, Warner Bros., Cartoon Network, TBS, TNT, and even networks that air NBA games and NASCAR races. By obtaining these assets, the carrier gets a lot more content to offer customers. Shows like The Big Bang Theory, Anderson Cooper 360, Game of Thrones, and more are all now under AT&T’s umbrella so it should be interesting to see what they do with it all.