Saturday, October 22, 2016

UPDATE: AT&T Buys Time Warner

Time Warner has agreed to terms, according to multiple sources, to be purchased by AT&T.  According to USA Today, AT&T is acquiring "a diverse media portfolio that includes HBO, CNN, TNT, TBS, Warner Bros., theme parks, Bleacher Report and a 10% stake in streaming service Hulu, at about $105-110 per share."  Prior to the rumor, TWX was priced around $70 a share.  It rose to $90 on Friday and will see a nice bump on Monday.  Rupert Murdoch and his Fox Network had tried previously to acquire Time Warner with an offer near $85 a share about a year ago.

Once the paper is signed, expected to happen later this weekend, the next step is likely regulatory approval by the FCC.  I would expect that some requirements will be imposed but that, since the Comcast acquisition of NBC was allowed, AT&T should have no major problems getting this deal approved as well.  A great catch for AT&T; I still wonder if Apple even kicked the tires and if so, what prevented them from putting out a competitive offer.  We may never know.

What will be the next media merger?  Will CBS and Viacom recombine, will Scripps or AMC seek a larger partner to add leverage to their deals, and will other telcos seek to bring content into their family?  Verizon went the digital route with AOL and soon Yahoo, but it may be necessary for them to look at more traditional video media producers.  For now the merger of Time Warner and AT&T is just the next leap in media mergers.