DawgTalkers.net Forums DawgTalk Everything Else... ATT in "Advanced Talks" To Buy Time Warner

Man, talk about moving towards a monopoly ...... ATT Phone,cellular, DirecTV, Time Warner Cable, RoadRunner, Warner Brothers, DC Comic Books .....

AT&T Is in Advanced Talks to Acquire Time Warner - WSJ
http://www.wsj.com/articles/at-t-is-in-advanced-talks-to-acquire-time-warner-1477061850

AT&T Inc. is in advanced talks to acquire Time Warner Inc., according to people familiar with the matter, a deal that would create a new hallmark in the rapidly converging realms of media, communications and the internet.

A deal, which could happen as early as this weekend, would unite AT&T’s portfolio of wireless, broadband and satellite TV services with Time Warner’s entertainment empire, which includes cable networks such as TNT, TBS, CNN, the coveted premium channel HBO, and the Warner Bros. film and TV studio.

The talks toward what likely would be a cash-and-stock deal have come together quickly, are fluid and still could fall through, according to people familiar with the matter. An agreement also could be delayed, they said.

Time Warner shares rose 9.6% to $90.94 in late-morning trading after The Wall Street Journal reported the advanced talks, white AT&T fell 2.6%.

A merger of the companies would be the most ambitious marriage of content and distribution in the media and telecom industries since Comcast Corp.’s 2011 purchase of NBCUniversal and would create a behemoth to rival that cable giant. A transaction would be far and away the biggest media deal of recent years. Time Warner has a market capitalization of $71 billion, while AT&T’s was $231.7 billion.

A deal likely would get intense regulatory scrutiny. Regulators have showed misgivings about the Comcast-NBCU deal—in particular, whether obligations placed on Comcast were enforceable—so it’s unclear if they will be willing to entertain another such merger.

A sale of Time Warner to AT&T would have echoes of the blockbuster 2000 AOL-Time Warner merger—then the largest deal of all time. That was a different bet on a converged media future, one in which AOL’s internet service would have complemented and boosted Time Warner’s content. But the merger ultimately proved a failure, hurt by the unraveling of the dot-com boom, a clash of cultures and poor assumptions about the way each business could help the other.

Dallas-based AT&T, led by Chief Executive Randall Stephenson, has been reshaping its strategy in recent years, as the U.S. cellular business became saturated and years of consolidation in that sector left no room for major deals. AT&T’s attempt to buy T-Mobile was killed by regulators in 2011.

Instead, AT&T turned to video, with the nearly $50 billion acquisition of DirecTV last year, instantly making it the biggest player in pay television. That pay TV business faces headwinds as more consumers cut the cord or look to trim their monthly bills, with streaming services providing new competition in the marketplace.

With its newfound scale, AT&T spent the past year aggressively negotiating deals with content companies, with plans to launch an over-the-top video service by year’s end. Owning Time Warner could offer AT&T a new lane to pursue growth and bring assets that would help along those streaming media ambitions.

For AT&T, the deal would eclipse DirecTV and may be the biggest deal since paying $85 billion for BellSouth in 2006. With $117.3 billion in long-term debt at the end of June, a Time Warner deal could give the company the world’s largest balance sheet with debt hitting almost $200 billion, according to analysts at New Street Research. The issuance of new stock, a common move in AT&T’s deal making, increase its total dividend costs, above the almost $12 billion in current annual payouts.

Bloomberg reported Thursday that senior executives of AT&T and Time Warner had met in recent weeks to hold preliminary discussions on various business strategies, including a possible merger.

Sixteen years since the AOL-Time Warner deal, much has changed, and the mashup of mobile, broadband and TV that has long been anticipated has been taking shape quickly. Consumers are streaming shows on phones and tablets, signing up for TV services without a connection from a traditional cable or satellite provider, and doing much of their media consumption on social media platforms such as Facebook.

Time Warner CEO Jeff Bewkes has positioned his company as a pure content player in recent years, spinning off AOL as well as the Time Warner Cable pay-TV unit and the Time Inc. magazine-publishing division.

In 2014, Mr. Bewkes fought off an unsolicited takeover bid from Rupert Murdoch’s 21st Century Fox, indicating AT&T wanted a far higher price than the initial roughly $80 billion offer that was on the table. (21st Century Fox and Wall Street Journal-owner News Corp share common ownership.)

People close to Time Warner signaled at the time that the company would prefer to test the marketplace more broadly—and potentially see if big tech or telecom players had interest down the road. At the time, AT&T was busy digesting its DirecTV acquisition, so it wasn’t a potential buyer.

Mr. Bewkes has used the intervening time to try to persuade Wall Street he could run Time Warner effectively as a stand-alone outfit in a media world where a few distribution giants are achieving enormous scale.

To answer the concern that Netflix and other streaming services are appealing to cord-cutters and people who never sign up for cable in the first place, he launched the HBO Now streaming service, which had nearly a million subscribers as of March. Time Warner also carried out cost cuts and layoffs and continued big content investments.

Among media players, Time Warner is attractive to AT&T in part because it doesn’t have a big shareholder with effective control and because it is relatively well-positioned for a media world where cable TV distributors want to carry skinnier bundles of channels. Time Warner has only a few major networks—some of which, like TNT and TBS, carry high-value sports content—compared to companies that have a host of channels with small audiences.

Acquiring Time Warner also would get AT&T further into the streaming business with Hulu. Time Warner bought a 10% stake in Hulu in August, joining Walt Disney Co., 21st Century Fox and Comcast Corp.’s NBCUniversal as an owner in the $5.8 billion video service. AT&T also is launching a DirecTV online service aimed at selling a robust package of TV channels.

capitalism, bro.

That's the first thing I thought.

It's not AT&T's first venture into the wonderful world of monopolies. They used to own Bell Telephone which got split into the baby bells in the early 80's.

Talked with my financial advisor today and he told me that my stock in TWC went up 10%.

I just don't see how this goes through.

ATT bought DirecTV, and that purchase was fast tracked by the Feds. There was, however, Fed opposition to the Comcast/Time Warner "merger". This merger would be just as bad, if not even worse. It would allow for almost absolute control of T V and internet in certain areas of the country. I realize that Dish would still be out there ..... but that would be about it. Internet would be a largely monopolized entity in many areas.

I really can't see this purchase being OK when the Compact acquisition of Time Warner was not. The Comcast/TW deal would have allowed for one large company that would have a presence across much of the country. However, there would have been minimal overlap. The 2 companies don't share the same areas.

ATT is a different animal. their purchase of TW would lead to them owning 2 TV choices and 2 internet choices in a huge number of US markets. I just have trouble seeing it gaining approval. Of course, I have been surprised before.

Time Warner Cable and Time Warner are not the same company. If AT&T buys Time Warner they would not be purchasing TWC (which changed its name recently to Spectrum). TWC/Spectrum was just bought by Charter Communications earlier this year.

As more people cut cable, I don't see the point in doing this. You'd own a monopoly on something that is fading away.

Ah, I didn't realize that. Thanks for pointing that out, as it does make a pretty big difference.

Thanks man.
Most people see and hear what they want to see and hear.
Time Warner is a provider,someone to fill up those channels.But to those who don't know their [censored] in the ground it's capitalism run amok

AT&T agrees in principle to buy Time Warner for $85 billion: sources | Reuters
http://www.reuters.com/article/us-time-warner-m-a-at-t-idUSKCN12L1Y0

AT&T Inc (T.N) has reached an agreement in principle to buy Time Warner Inc (TWX.N) for about $85 billion, sources said on Friday, paving the way for what would be the biggest deal in the world this year, giving the telecom company control of cable TV channels HBO and CNN, film studio Warner Bros and other coveted media assets.

The deal, which has been agreed on most terms and could be announced as early as Sunday, would be one of the largest in recent years in the sector as telecommunications companies look to combine content and distribution to capture customers replacing traditional pay-TV packages with more streamlined offerings and online delivery.

AT&T, which sells wireless phone and broadband services, has already made moves to turn itself into a media powerhouse, buying satellite TV provider DirecTV last year for $48.5 billion.

It also in 2014 entered a joint venture, Otter Media, with the Chernin Group to invest in media businesses, and has rolled out video streaming services.

AT&T will pay $110 per Time Warner share in cash and stock, or about $85 billion overall, sources told Reuters. It will need to line up financing to pay for the deal, since it only has $7.2 billion in cash on hand. This could put pressure on its credit rating as it already has $120 billion in net debt as of June 30, according to Moody's.

Time Warner's shares rose almost 8 percent in regular trading, and a further 3.4 percent after hours, to $92.50, giving it a market value of about $73 billion. AT&T closed down 3 percent at $37.49.

Time Warner is a major force in movies, TV and video games. Its assets include the HBO, CNN, TBS and TNT networks as well as the Warner Bros film studio, producer of the “Batman” and “Harry Potter” film franchises. The company also owns a 10 percent stake in video streaming site Hulu.

Time Warner Chief Executive Jeff Bewkes rejected an $80 billion offer from Twenty-First Century Fox Inc (FOXA.O) in 2014, but sources said on Friday that the former suitor had no plans to renew its bid.

The Wall Street Journal reported on Friday that Apple Inc (AAPL.O) approached Time Warner a few months ago about a possible merger.

CONTENT AND DISTRIBUTION

Owning more content gives cable and telecom companies bargaining leverage with other content companies as customers demand smaller, hand-picked cable offerings or switch to watching online. And new mobile technology including next-generation 5G networks could make a content tie-up especially attractive for wireless providers.

"We think 5G mobile is coming, we think 5G mobile is an epic game-changer," Rich Tullo, director of research at Albert Fried & Company, said in a note, adding that mobile providers would be in position to disrupt traditional pay-TV services.

A previous Time Warner blockbuster deal, its 2000 merger with AOL, is now considered one of the most ill-advised corporate marriages on record.

Dallas-based AT&T and New York-based Time Warner declined to comment.

Cowen and Co analyst Doug Creutz questioned the strategy of buying content instead of licensing it.

"What does it get them that they can't get by licensing Time Warner content and at a much cheaper price than buying the whole company?" Creutz asked, noting it was unclear what savings could be gained "from stapling distribution and content together. It's been tried. It never works."

AT&T would likely be able to win U.S. antitrust approval for the deal, some experts said, but regulators likely would put conditions on approval, some experts said.

Andre Barlow, an antitrust lawyer at the law firm Doyle, Barlow and Mazard, said the government may worry about whether other cable and internet companies would continue to have access to Time Warner content like HBO and CNN.

The U.S. Justice Department "will look at it but they won't stop it," said Darren Bush, who teaches antitrust issues at the University of Houston. Bush predicted regulators as a matter of course would make a second request for information, meaning the review would last several months.

The media industry has been seen as ripe for consolidation, and several stocks rose on the news, including Netflix Inc (NFLX.O), which closed up about 3.4 percent, and Discovery Communications Inc (DISCA.O), which ended up 3.6 percent.

(Additional reporting by Liana B. Baker in San Francisco, Anya George Tharakan in Bengaluru and Diane Bartz and David Shepardson in Washington; Writing by Meredith Mazzilli; Editing by Will Dunham and Bill Rigby)

Gee, weren't you in a peachy mood last night.