Say hello to one of the largest media conglomerates in the world.
Just two days after a US district court judge gave the go-ahead, AT&T completed its $85.4bn takeover of Time Warner on 14 June.
This in effect creates a telecoms and media powerhouse that combines AT&T’s 119m mobile and broadband subscribers in the US alone with a digital library that will strive to win back territory from nimble newcomers Netflix and Amazon.
‘We’re going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors and advertisers’
– RANDALL STEPHENSON
The mighty media machine includes cable channels such as HBO and CNN as well as the Warner Bros film studio.
The new economics of entertainment
“The content and creative talent at Warner Bros, HBO and Turner are first-rate,” said Randall Stephenson, chair and CEO of AT&T.
“Combine all that with AT&T’s strengths in direct-to-consumer distribution [D2C], and we offer customers a differentiated, high-quality, mobile-first entertainment experience.
“We’re going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors and advertisers.”
Stephenson said the future of media entertainment is rapidly converging around three elements required to transform how video is distributed, paid for, consumed and created: premium content, D2C distribution and high-speed networks.
AT&T has more than 170m D2C relationships across its TV, video streaming, mobile and broadband services in the US; mobile in Mexico; and TV in Latin America. This is in addition to D2C digital properties such as HBO Now, Boomerang, FilmStruck and CNN.com.
Stephenson said that AT&T’s wireless and fibre network will include investments in 5G and additional bandwidth, which will be required for premium video and emerging 4K and virtual-reality content.
But, in what has to be one of the most dramatic land grabs in telecoms and entertainment history, AT&T has gone out on a limb and has taken a big risk financially that no doubt its leaders and shareholders are hoping will pay off handsomely.
As part of the $85.4bn merger deal, Time Warner shareholders each received 1.4 shares of AT&T stock as well as $53.75 in cash per share.
Including net debt from Time Warner, AT&T now has $140.4bn in net debt.
Let’s hope its gamble pays off.
Inside the Time Warner Center, New York. Image: Sean Pavone/Shutterstock