The proposed AT&T merger with Time-Warner may not be as beneficial as claimed by both communications giants. UPDATED.
WASHINGTON, October 26, 2016 – AT&T (symbol: T) has recently offered to purchase Time Warner (TWX) for $85.4 billion. Verizon may get hurt in the fallout of the deal, which is unlikely to happen unless it can overcome anti-trust sentiment in Washington. But whatever the eventual outcome, AT&T’s purchase signals the company’s latest attempt to survive, and perhaps even prosper, in the changing media world.
In addition to its proposed purchase of Yahoo (YHOO), Verizon recently launched unlimited data plans for its customers as well as a smartphone in continuing efforts to retain and increase its competitive dominance in the wireless market, even as AT&T, Sprint (S), and T-Mobile (TMUS) move aggressively to catch up.
AT&T is attempting to take the lead by pushing content creation while retaining its customary high dividend payouts.
If you want to know how Hillary REALLY stands on an issue look at her donors
At&T is a top Clinton donor
Hillary wont block their merger
— Charlie Kirk (@charliekirk11) October 25, 2016
If regulators approve, the AT&T/Time Warner deal is expected to be completed by late 2017. However, in addition to considerable regulatory challenges, they may also have to overcome the hurdle of both Donald Trump’s and Hillary Clinton’s ongoing threats to block it. AT&T’s announcement came just 17 days before the presidential election, putting them front and center on the politicians’ radar screen and in the presidential candidates’ minds.
Adding to the negative comments coming out of Washington, former Democratic presidential candidate Senator Bernie Sanders also argued against the proposed merger saying “…the next administration should “kill the Time Warner/AT&T merger. This deal would mean higher prices and fewer choices for the American people.”
According to a Reuters wire report,
“The U.S. Senate Judiciary Committee’s antitrust subcommittee will hold a hearing on Dec. 7 on the proposed merger of Time Warner Inc <TWX.N> and AT&T Inc <T.N>, and the companies’ chief executives will testify, the committee said in a statement. ‘The hearing will examine the impact of the proposed transaction on consumers, including the implications for competition and innovation in the creation and distribution of video content,’ the statement said.”
Elsewhere in the TV and online entertainment sector, Verizon (VZ)—which earlier acquired AOL—has been adjusting its proposed offer to purchase Yahoo, given that the communications giant has yet to figure out how to handle an asset that was massively breached by cyber hackers, leaving many shareholders to wonder whether the deal is worth it. Content may indeed be king in this environment. But the cost of acquiring it is still a big question.
If it is ultimately approved, the potential AT&T/Time Warner merger could allow AT&T to acquire major brands encompassing television, film, sports, news, video games and mobile and residential internet services, allowing the post-merger firm to control many popular shows including “The Last Ship,” “Falling Skies” and a basket of sports programming including many Major League Baseball contests.
— TechCrunch (@TechCrunch) October 25, 2016
This new deal is being strongly compared to Comcast’s (CMCSA) merger with NBCUniversal. Business analysts insist that this deal failed to improve TV or Internet technology while increasing prices and limiting choices for consumers. The proposed AT&T deal would further push consumers to access content from established players instead of seeking out new, innovative products.
While many critics are giving a thumbs-down to its proposed acquisition, AT&T is seen by consumers as more honest and boasting a better record with them when compared to Comcast. AT&T has already succeeded in acquiring DirectTV and folding that acquisition comfortably into its management structure, incorporating a video service that includes popular programming such as NFL Sunday Ticket and serves as a direct competitor to Verizon’s FiOS offerings.
According to a Reuters wire report,
“The U.S. Senate Judiciary Committee’s antitrust subcommittee will hold a hearing on Dec. 7 on the proposed merger of Time Warner Inc <TWX.N> and AT&T Inc <T.N>, and the companies’ chief executives will testify, the committee said in a statement. ‘The hearing will examine the impact of the proposed transaction on consumers, including the implications for competition and innovation in the creation and distribution of video content,’ the statement said.”Click here for reuse options!
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