In the world of corporations and media, bigger is simply better.
Comcast bought NBCUniversal and Verizon Communications for $30 billion and now AT&T has bought one of the remaining crown jewels of the entertainment industry.
The telecommunications giant agreed on October 22, 2016, to purchase Time Warner, the home of HBO and CNN, for about $85.4 billion, creating a new super corporation that is likely capable of producing content and distributing it to millions with wireless phones, broadband subscriptions, and satellite.
AT&T and Time Warner announced that their boards unanimously approved the purchase.
Many analysts and investors have noted that Time Warner was a part of one of the biggest slip-ups when it sold itself to AOL at the height of the dot-com boom. To give you a sense of how bad this deal was, many Millennials have only vague memories of AOL.
As cable corporations begin to feel the heat of Millennials opting instead to watch their content through the web, it has pressured them to seek consolidation partners. These media companies are expecting drops in fees from cable and declining revenue from advertisers. Acquiring Time Warner would give them the leverage to negotiate better deals with both service providers and advertisers.
AT&T’s top priority was finding new ways to reach consumers. Time Warner is the home of HBO, which offers among the best quality shows in the business and has been the leader in doing so since its classic hit The Sopranos, and now offers Game of Thrones and Westworld. It can now deliver these shows to consumers who only have internet and no cable.
This announcement affirms that AT&T is ambitious. One of the former “Baby Bells” that arose from the breakup of the original AT&T, and trying to regain the power from its parent’s empire.