A Second Golden Age?

It was officially announced on Monday, October 22nd, that AT&T is in the final phase of purchasing the Time Warner company. AT&T’s business move is costing an astonishing $85 billion dollars, through a mixture of cash and shares. In this transaction, cash will represent $42.7 billion dollars, which is close to half the total sum. This acquirement of Time Warner also brings HBO, CNN, and the Warner Bros. studio under the flag of AT&T. After the deal closes, Time Warner shareholders will own around 14.4%-15.7% of outstanding AT&T shares. In addition, Time Warner will also represent close to 15% of AT&T’s combined company revenues.

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There is an eerie resemblance between this merger and the Golden Age of television when production companies could own production, distribution, and exhibition. This sort of vertical integration caused the Federal Communications Commission(FCC) to forcefully break apart these production companies because of the exploitation taking place. With this merger, the FCC might be forced to revisit the Internet Neutrality law, in effort to protect people from possible exploitation. Senator Al Franken has already expressed his concerns about this merge in a general statement saying “I’m skeptical of huge media mergers because they can lead to higher costs, fewer choices, and even worse service for consumers.” AT&T’s business decision will be interesting to follow not only to see if this move was successful, but also if any changes will be made to existing laws or the emergence of new laws to protect us consumers.

Link to the original article here.

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One thought on “A Second Golden Age?

  1. Time Warner already costs too much, I cannot imagine what it would be like if they basically owned the market. AT&T has competition in the actual phone company, but building the company by purchasing others is scary. It can make one company too large and I do not like that!

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