It had been talked about over the past week, but was officially announced on Saturday. Longtime telephone and internet giant AT&T will be buying media conglomerate Time Warner for $85 billion.
Time Warner’s assets
Yes, this means that Bugs Bunny, Superman, Yogi Bear, and Steven Universe all now work for Ma Bell. Time Warner’s assets are huge. On the animation/comic side alone, they own:
- Warner Bros. Animation (Looney Tunes, “The Lego Movie” franchise)
- DC Comics (Superman, Batman, Wonder Woman, the Justice League)
- Hanna-Barbera (The Flintstones, Scooby-Doo, Yogi Bear)
- The MGM library (Tom and Jerry)
- Cartoon Network Studios (“Adventure Time,” “Samurai Jack,” “Steven Universe“)
- Adult Swim (“Aqua Teen Hunger Force”)
Yes, it’s quite a few assets, and all valuable intellectual property. All which should serve its new telco owners well.
As others have noted, AT&T is likely buying Time Warner to avoid being merely just a “dumb pipe” for transmitting phone/Internet data. Comcast has taken similar cues by buying NBC/Universal years ago.
For these companies, being able to offer extra features on top of their Internet/mobile services makes owning media producers lucrative. It also shores things up in case net neutrality rules or cord cutting reduces revenues. AT&T also can more easily go up against fellow telco Comcast, which recently got even bigger by buying DreamWorks Animation.
Time Warner’s been through mergers and new owners over the decades. The most infamous was its 2000 merger with AOL to become “AOL Time Warner.” That was broken up by decade’s end, but still went down as one of the all-time worst corporate mergers.
More recently, Time Warner spun off its Time, Inc. magazine side, though oddly they haven’t changed the company’s name. I assume with the AT&T purchase, a new name might finally be coming. “AT&T Time Warner?” “AT&T Warner?” A comeback for “Warner Communications?”
Pros and cons
On the plus side, hopefully the company’s new owners focus more on improving the quality of its media output. Time Warner’s current owners seemed more concerned about bean-counting and shoring the company up for a future sale.
I’d also hope for some improvement in “corporate synergy.” The various divisions of Time Warner seem treated like individual fiefdoms pitted against each other. The Turner broadcasting side (CNN, Cartoon Network, TNT, TBS) and its media output still feels somewhat disconnected from the Warner Bros. and DC Comics sides.
The above said, I still stand against the merger on principle, just as I did for Comcast’s previous mergers, NBC and Universal merging, and even Disney buying ABC in the 1990s. The deal will be subject to media scrutiny. However, lackluster anti-trust laws and differences from the failed AT&T/T-Mobile merger should prevent the deal from being scuttled outright.
There’s been some media reaction already to this merger news:
- USA Today notes that this will probably spur other media mergers. The paper cites CBS and Viacom as possible takeover targets.
- Reuters mentions criticism from both major US political parties on this merger.
- Mashable brings up the issue of net neutrality.
What do you make of this merger?