Massive merger shows how global media empires are made.
The $85.4bn merger of telecoms giant AT&T with entertainment behemoth Time Warner has been granted legal approval by a US district court judge.
The approval clears the way for the biggest telecoms company in the US to take ownership of an entire media empire that includes cable channels such as HBO and CNN as well as film studio Warner Bros.
It heralds a new era in tech and entertainment where once-powerful cable companies and studios reposition themselves to go to war on a new battlefield currently being dominated by the likes of streaming platforms such as Netflix, Amazon and YouTube.
This is a battlescape whereby Netflix is now worth more than Disney and where Comcast is competing to buy a significant chunk of Rupert Murdoch’s 21st Century Fox media empire, including pan-European broadcaster and broadband provider Sky.
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The prize in these shifting sands is a consumer that wants the best of everything – especially broadband and mobile connectivity along with the best entertainment – in return for a recurring fee.
For AT&T, the takeover of Time Warner will land it content from HBO and CNN that it can feed to its 119m mobile, internet and video customers, going head to head with Netflix for consumer eyeballs.
Yesterday (12 June), US district court judge Richard Leon decided that the AT&T purchase of Time Warner for $85.4bn was legal and he did not impose any conditions on the merger’s approval. He also urged the US government not to seek a stay on the deal.
The US Department of Justice (DoJ) sued last year to block the merger in the interest of competition in the cable TV market.
“We are pleased that, after conducting a full and fair trial on the merits, the court has categorically rejected the government’s lawsuit to block our merger with Time Warner,” AT&T general counsel David McAtee said in a statement.
“We look forward to closing the merger on or before 20 June so we can begin to give consumers video entertainment that is more affordable, mobile and innovative.”
For its part, the DoJ expressed disappointment.
“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,” said assistant attorney general Makan Delrahim.
“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,” Delrahim said.