Note that this is AT&T buying Time Warner the content company [1], not Time Warner Cable the ISP [2]. It's analogous to Comcast's NBC Universal acquisition [3].
This is a very important distinction. To aid the lazy, the wiki articles JumpCrisscross link state that Time Warner Cable is a spin off from Time Warner in 2009 and they are independent of each other today, despite still sharing part of a name. Therefore, this doesn't really appear to be an actual consolidation.
EDIT: as drieddust notes, it is vertical integration of sorts.
That is their plan pretty much.ISP are feeling cheated for no good reason. They think while they invest in upgrading the infrastructure to support the higher bandwidth demand, content provider keeps Lion's. They want to control of that revenue stream.
In UK I recently asked for an upgrade of bandwidth for which they don't have to change anything since lines are already there, I still had to sign a new 12 month contract despite being a long term customer. Did I had an option? Not really because only they all have similar terms. There is so few of them that customer don't really have a choice.
Vertical integration looks consumer friendly in short term only. In long term it just kills innovation and competition and screws up user.
I agree with you on ISPs having control over the content is a bad idea. But I also urge you to consider that the pressure on lower price from customers and government regulators are a real pain. There is a reason why ISP sector doesn't have a lot of competition (some of it has to do with strong-arming by existing market leaders in countries like the US) because it requires an insane amount of investment on infrastructure that constantly needs to be upgraded and maintaining last mile fibre can be a major pain in the ass (and expensive). Most ISPs don't start to see a return on their investment 10-15 years after the fact.
> Most ISPs don't start to see a return on their investment 10-15 years after the fact.
I think a fair amount of the anger at the huge ISPs is that they don't invest in many areas' infrastructure while raising rates, reducing the value of services by retroactively adding caps, and otherwise being exploitive in noncompetitive areas. AOLT&T (sorry, couldn't resist), in particular, is also well known to use threats of not expanding infrastructure as a political weapon, while Verizon is better known for pocketing billions in concessions while also not building infrastructure. But both do both.
Now they want to confuse, and of course raise, your bill further, blurring fees for connectivity with content.
Thanks it's good to understand other side of the table. Your experience actually validates my premise that big player are squeezing out smaller players.
They can even run on a loss for years just to make it unattractive for smaller/newer player.
Oligopoly is about horizontal integration not vertical. If there are 2 phone companies instead of 10, that's worse for consumers. The general history of content and pipes vertical mergers has been good for customers but bad for the acquiring shareholders. (Look at AOL Time Warner for example)
Time Warner Cable (TWC) was an American cable telecommunications company. [...] On May 26, 2015, Charter Communications announced that it would acquire Time Warner Cable for $78.7 billion, along with Bright House Networks in a separate $10.1 billion deal, [...] the purchase was completed on May 18, 2016; Charter continues to do business as Time Warner Cable in its former markets, but plans to re-brand TWC's systems under its Spectrum brand in the future.
... and one of the first things Charter (now Spectrum, with the addition of Time Warner Cable) did was raise rates across the board and cancel the MAXX upgrades that Time Warner had been rolling out in a lot of areas... after spending months "convincing" regulators that the merger would not harm the consumer (lol).
The telecommunication "market" in the US is so amazingly consumer hostile right now, getting worse and worse and it is looking increasingly like feint efforts like Google Fiber won't really do anything to change it outside of a few very small markets. But there's nothing the consumer can do in protest because there are no options.
they also told us (TWC engineers) that there would be "absolutely no job cuts from the merger" well they have started forcing people to relocate or take severance as a way to cut work force stealthily.
fyi many are aware of this but TWC was bought and merged with Charter a few months ago. There is no "Time Warner Cable" anymore, most of the branding is switched over now.
Based on the top upvoted comment from echelon in this thread, there seems to be widespread confusion about Time Warner the media company.
Maybe a better way to think of it: AT&T is buying HBO, TBS, and Warner Bros.[1]
(If you squint a certain way and look at Yahoo as a "media company"... the AT&T acquisition of HBO+TBS+WB is somewhat a parallel industry move to Verizon's acquisition of Yahoo.[2])
AT&T is not buying the other company with the similar name Time Warner Cable. Yes, that other company owns some internet pipes (ISPs) but it is not involved in this transaction.
So which giant will turn into a failing company? AT&T or Time Warner? I wish Fucked Company was still around. I want to know who people would bet against.
Why not just let AT&T and Verizon get back together and lets get back the original AT&T. How is this good for the country? They own directv. They own all these local sports networks. I hope the government regulators take a strong look at this.
Here is list of assets they own:
New Line Cinema, Home Box Office, Turner Broadcasting System, The CW Television Network, Warner Bros., CNN, Cartoon Network, Boomerang, Adult Swim, DC Comics, Warner Bros. Animation, Castle Rock Entertainment, Cartoon Network Studios, Esporte Interativo, Hanna-Barbera Productions, Warner Bros. Interactive Entertainment
The public servants didn't have a say yet. And last year they did block Comcast's merger with Time Warner, as well as AT&T's purchase of T-mobile in 2011.
T-Mobil is an infrastructure company. Time Warner is a content company. You can't compare the regulators blocking an infrastructure company (AT&T) from purchasing another infrastructure company (T-Mobile) to a infrastructure company (AT&T) acquiring a content company (Time Warner).
I'm not saying they are comparable; I'm pointing out that regulators are willing to block mergers and purchases, unlike the implied claim that they'll rubber stamp anything as long as they've been paid off.
As if the people who see bribes everywhere won't just claim them that the right people just weren't bribed, or that the competition's bribes were more convincing. Once bribery is assumed without evidence, it explains everything.
At the same time.. Who cares? all these channels could disappear and many cord cutters wouldn't notice. I wouldn't. There's funny pictures online with text captions. That seems to be catching on just fine.
Vertical integration like this is one of the major reasons for the promotion of bandwidth caps. Which certainly do affect cord cutters. It can also results in reduced network investments and higher traffic congestion.
It can also cause digital licensing shenanigans, like excessively high licensing fees, and even more platform fragmentation.
It goes on and on. At this point I fully expect us all to one day do our banking at Google, receive our medical care from AT&T, and get all of our meals and groceries from Taco Bell.
It seems like sports is the last frontier that's keeping traditional linear TV alive. Nobody wants to stream the game tomorrow; the outcome is already known which makes it unexciting to watch. Time Warner has plenty of exclusive sports deals, which gives AT&T leverage over their competition that also has exclusive sports deals (Comcast is the big one). If anything, this creates some incentive for cross-licensing that didn't exist before, which could in theory be good for end users. (I'll believe it when I see it, though.)
Alternatively, traditional TV still has a lot of money behind it, so it makes sense to keep it alive for as long as possible. If you couldn't buy HBO Now and you like HBO shows, your "only" choice is to buy all the channels you don't watch in order to be able to watch HBO. That would be good for both the cable company, and those other channels nobody wants. If a cable company controls HBO again, I think we can see where this is all headed.
Personally, I don't think AT&T can really afford this acquisition, so it might be the beginning of the end for them. If I were AT&T I would spin off everything that wasn't my spectrum licenses, and have a handful of employees raking in pure profit without having to deal with the pesky business of building infrastructure, producing television, billing customers, etc. Kind of like all the companies that own airplanes and lease them to the airlines, or I suppose DeBeers and diamond mines.
Sports is keeping traditional TV alive somewhat, but there are ways to stream sports online without a traditional cable / sat subscription, such as Sling.TV
Sling.TV has problems with licensing agreements where they can't show certain "in market" games, for instance. (There's other, subtler licensing problems too.)
The way that sports got split between the major networks and exclusivity agreements means that their cabal is essentially impossible to entirely replace via a streaming service for any kind of reasonable price even though I can sometimes get the product for free over the air.
Media licensing is a shitshow. Honestly, at this point, I'm for extending the situations under which a compulsory license is granted, setting up a fixed fee, and just letting people have at it.
We need a new model. Copyright as currently implemented is non-functional.
Copyright is totally functional. What you are really saying is you want cheaper sports and the people who don't give you what you want are dicks. It's a mistake a lot of people make.
As just one instance of the copyright system breaking down, the DMCA has seriously stifled artists and led to massive censorship of controversial or critical material by vested interests and malicious actors. There are hundreds or thousands of articles on DMCA notices being used as restraint on legal speech or by people stealing the capitalization of content rather than copyright enforcement mechanism.
> Nobody wants to stream the game tomorrow; the outcome is already known which makes it unexciting to watch.
Startup idea: neural-network-based filter for social media applications to hide any discussion of the results of a particular game until after you watch it. Bonus if it can also hide movie spoilers.
> Startup idea: neural-network-based filter for social media applications to hide any discussion of the results of a particular game until after you watch it. Bonus if it can also hide movie spoilers.
Fuck no. Last thing you want is nation-states hacking that and delivering censorship straight to your mind or "Funny how this ballot has one candidate only".
People could even intentionally inflict this on themselves, such as "blocking" a person after a bad breakup so you can't see them or hear their names when they come up in conversation - I hear there might be a Black Mirror episode that touches on this (I'm yet to watch any of them).
Edit: Apologies for my off-topic rant: I read "neural-network-based filter" as "neural filter". I'll leave my comment as a monument to my derpery.
I ended up introspecting on the reasons for that, realized that every single one of them applied equally well to watching it live, and as a result stopped watching entirely.
"Nobody wants to stream the game tomorrow"
This assumes the sports you like and teams you watch are in your country. This may often (usually?) be true but sometimes isn't. Some sports make it impossible to watch live - F1 racing changes countries for each race for example. Who wants to get up at 3am when they have work the next day. I'd watch more sport if streaming was possible.
Unless you don't have cable - which I don't. If people didn't buy content they don't want it would drastically change things in terms of how much money sports content was worth. It would be an interesting scenario to see play out.
F1 is timed for British viewers. I used to watch the events live over the web. No commercials and no delays. They almost invariably started at 5am on Saturday (Pacific time) for practice. I would post things on Twitter in #F1 before US viewers even saw the video due to network video delay of about 7 seconds. ;)
> Time Warner Cable is not part of Time Warner, so they're not consolidating service providers. AT&T just wants some content production companies.
That might be what they say, but I think it's to compete with Google. While Google may have given up on further fiber rollout after the existing ones, Google still plans to continue to expand and compete with AT&T and other broadband providers but as a wireless provider. Google Fi is just the start. When they bought up Motorola they ended making a better phone themselves (the Pixel). They're using Sprint and T-Mobile for Google Fi now, but plan to become a better wireless data provider.
Of course, it remains to be seen whether these plans will work.
I should have only quoted "AT&T just wants some content production companies" because the rest seems to have confused you. I wasn't disputing ownership.
I think what they were trying to say is that AT&T is buying up Time Warner Cable/Spectrum to own more of the broadband and cellular service markets, such that they can better compete with Google, now offering broadband and Google Fi data service over Sprint and T-Mobile's cellular networks.
I'm not so sure about what our future interactions with Google or AT&T will look like, but I do know Taco Bell will win the forthcoming franchise wars...
Time Warner Cable [1] used to be a part of Time Warner Inc., but:
> In the past, other major divisions of Time Warner included Time Inc., AOL, Time Warner Cable, Warner Books, and Warner Music Group. All of these operations were either sold to other investors or spun off as independent companies between 2004 and 2014.
One could look at it another way... the fact that they think that this could even be possible and are willing to go through the motions to reach the agreement speaks volumes about what these giant companies think of the "regulators".
It's not that simple. Announcing a merger doesn't necessarily a high chance of success. A recent, relevant example is Comcast's 2014-2015 merger with TWC that was called off after regulator push-back.
> AT&T has reached an agreement to buy TWC. The deal has been neither reviewed nor approved by regulators (yet).
Then let me ask something else.
What is going on with the boards of these two companies? Do they think this will fly? I believe they certainly must.
I assume that the people in charge of these companies are rational and experienced, and that they considered the regulatory hurdles before moving forward with this deal. They must think they can get away with this plan, otherwise why bother with the trouble and expense of setting it up in the first place?
They believe it because it almost certainly will fly. Comcast and NBC/Universal went through and we haven't seen any signs of reduction in competition. Especially now that the FCC has made net neutrality the law, there shouldn't be any fear about vertical monopoly over media.
It's absurd to think that media can be constrained into traditional mediums anymore. Television is dying.
Hell, AOL already did this exact merger without any problems.
It hasn't undergone regulatory approval yet, so calm down. :D Remember when regulators planned to block AT&T's purchase of T-Mobile? It could happen here also and just like then I'm sure there will be a public comment period.
Competition without regulation ultimately leads to monopolies. Companies survive because they're better than other companies, and eventually they get big enough to just buy off or crush newer competitors. At this point, the monopoly will either have internal problems resulting in inefficiency, or an external regulator in the form of government.
What's wrong with your logic is that the 'competition' that we see in this world is so highly regulated already. When you get big enough you start writing the laws to protect your monopoly. Organizations like this can't handle competition from tiny technological disruptors because they are like trying to do a 180 in a loaded container ship. They can crush any competition with legal bills and pass that cost on to the customer.
Your logic is spot on.When a natural monopoly arises, it becomes essential regulate but sadly we are too much blinded by regulation free market that obvious is ignored.
Even Adam Smith advocated regulations when its appropriate.
do you know by any chance where I could find a good (as complete as possible) list on M&A deals within pharma industry for the last 20 years, for the 10-20 largest pharma companies? I mean, the biomedical picture you gave a link to is good already but it doesn't have recent Mansanto acquisition and tons of other deals. And Google just gives a small glimpse into such deals here and there but I can't find a comprehensive list yet.
they're bought, and paid for, and all in the knowledge that the majority of the public is too busy voting on social issues (or not voting at all) to change matters.
Slightly OT: The Time Warner Cable (TWC) vs. Time Warner confusion in this thread and elsewhere will luckily be resolved soon as the TWC brand is being phased out in favor of Spectrum [1].
What makes you so sure? For one thing, it's perfectly legal for non-insiders to figure out which way the wind is blowing on a deal and make a bet in that direction.
Comcast didn't try to buy Time Warner, they tried to buy Time Warner Cable. Two different companies (as has been mentioned in probably 1/3 of the comments on this thread).
The combination of Comcast and TWC would have been:
infrastructure
+ content
+ infrastructure
allowing the content portion of Comcast to have _more_ infrastructure leverage over competing content providers. Those competing content providers lobbied against the merger. Competing content providers (not already owned by an infrastructure company) may also lobby against this AT&T merger with Warner Bros & HBO.
Trump said today, in a speech in Gettysburg, PA, that if he becomes president, he will work to block this transaction because it consolidates too much power.
How would a real estate investor have a conflict of interest in regards to a telecom merger?
If you want to talk about a conflict of interest in presidential candidates, Hillary Clinton has received at least a combined $1,564,708 in political contributions from AT&T and Time Warner. Additionally, AT&T's senior executive Vice President James Cicconi has endorsed Clinton.
Trump has many more businesses than just real-estate and his content competes with the content factory that AT&T wishes to procure (Time Warner, not time warner Cable the ISP).
Though he's already had a run-in with TWC (not involved in this deal but I highly doubt that would matter much to Trump).
The comment is relevant to what is being discussed, and not a tangent - he is a candidate for the Presidency, which is an office that has influence on whether this deal will go through, and he did say that. Saying Trump is human garbage would be a tangent.
We needed Teddy Roosevelt trust busting like that 7 years ago, preferably from someone without a lot of money in competitors of Time Warner (although Teddy wasn't the poorest chap).
Content is king and now the telcos are likely fighting content rates renegotiations by acquiring content companies like TW. US cable subscription business was nearly 92 million households a few years ago. Now that Netflix has crossed more than half of that and they are competing with original content, the telcos have something to worry about. Comcast can do the same with NBCUniversal, the other telcos are left with low negotiation power come channel distribution deal time. The big BIG aspect of this deal is the number of top consumer-demanded channels run by Turner. ESPN (non-Turner) is the most expensive, but then TBS, TNT, and CNN, and Cartoon Network are near the top on the price list for cable distributors. In some plans they define upper-level subscription tiers. This acquisition seems good for competition - Comcast and AT&T would be less inclined to limit access to cable channels to their subscribers only if the other party has something they want.
Why would they scuttle it? They'll give a few token concessions and continue to screw consumers. The only way to win in this game is to invest in these monopolies.
"In April 2015, it was reported that the U.S. Department of Justice was preparing to file an antitrust lawsuit against Comcast and Time Warner in a bid to halt the merger, arguing that the merger would reduce the level of competition in the cable television and broadband internet industries. On April 24, 2015, Comcast officially announced that it had called off the merger."
+1 I'm not sure if they're allowing this through for upper-tier competition.
Although when you have a deal this large, the law firms are bound to be well connected and will be pulling every string they have to push the deal through.
This should be simply illegal. A monstrous merger of massive network operator, and huge media company will create an abusive monopolist of gigantic proportions. I.e. they'll use their network to disadvantage competing media (they already do it, violating Net Neutrality with zero rating of their own video services). So, if they already do it, do you think becoming bigger they'll improve? It's an antitrust 101, but somehow this isn't banned outright.
Looks like regulators are on the fence about this transaction: "Regulators have indicated misgivings about the prior Comcast-NBCU deal—in particular, whether obligations placed on Comcast were tough enough and enforceable—so it is unclear if they will be willing to bless another such merger. At the very least, former regulatory officials say there could be significant conditions placed on the combination."
WSJ
The government spent untold amounts of money breaking up AT&T, then allows them to continue merging into a bigger company than ever.
AT&T and Time Warner both suck. Their goal isn't to produce great products, it's to protect and expand their monopolies. One of the reasons most of us have only 2 choices for Internet service is that AT&T and the former TWC pay local community governments in exchange for exclusive access to the community. And if a community tries to "do their own thing", they get sued.
Google is trying or considering coming to Louisville and the first thing AT&T did was sue them. I know this deal is about the TWC media company, but AT&T's behavior in other areas is still relevant.
Tell me again how finding 10B to go to Mars is impossible?
This is a satirical comment, trying to make a point: Depending on the context, the same amount of money can be considered anything from huge to tiny. It seems ridiculous to me that hundreds of billions routinely get pushed around in business mergers or military deals, where no one blinks an eye, but scraping together a tenth of that to do something actually interesting and/or useful is a major undertaking. Just goes to show how unfairly balanced this system is (regardless of which way it's balanced; some things have it easier than others).
Seems to be a negative response to this deal re competitive implications. Can someone outline their theory of harm? I do some work in competition economics but am not American and don't know a lot about either company?
Oh great, more Telco consolidation. First the banks are too big to fail after the Great COnsolidation of the 90s and 2000s, and now this. So we can have more arguments about Title I and Title II and more arguments about the illusion of choice when we have only two choices ... DT or HC, Title I or Title II...
The same thing is happening here in France where a major telco provider became also a major mass media player through acquisitions. I am not very comfortable with this trend especially regarding net neutrality, privacy and public opinion influence power.
Assuming the price doesn't open at 109, maybe. The deal might still fail for a variety of reasons and then you are stuck with the stock and may or may not have to take a loss. If you are new to trading, I would say step away from event driven trading strategies. Understand trading first before playing this approach.
They are huge ISPs. When a crooked huge ISP owns media services, they can abuse their ownership of the physical network to disadvantage competing services which are routed through their network. And they are already doing it!
Trump also said that he can grab people's private parts without retribution. Unfortunately, that trumps whatever he thinks about ISPs owning content providers.
Maybe his charity wants to buy Time Warner.
(Edit: people are now going around downvoting my other comments because of this one. Good work guys, Emperor Trump has noticed your efforts!)
At the risk of starting a distracting side conversation—whether his language was crass or not is irrelevant. The issue is that he was bragging about committing sexual assault.
1) He lies every time he opens his mouth, so I wouldn't take what he says at a rally (or a hot mic) at face value.
2) They won't consult him for his opinions on mergers and acquisitions when he's serving his prison sentence for sexual assault.
Finally, if past elections are any indication, I would not recommend voting for someone based on one issue. Campaign promises are more difficult to implement than candidates imagine.
If you like Trump, by all means vote for him, but don't vote for him over AT&T and Time Warner.
> Campaign promises are more difficult to implement than candidates imagine.
Oh, the candidates know it damn well. But they know the electorate doesn't know it. So they lie their asses off because it's how you win when all the other candidates are lying their asses off.
Bernie supporters actually believed he could usher in universal healthcare, free college, etc. Trump supporters think he's going to build a giant wall. Johnson supporters think they're going to get legalized weed in the entire US. As if the presidency was a monarchy and the legislative and judicial branches didn't exist. (Clinton supporters ... well they're just terrified of Trump winning.)
We don't have the candidates we need, but we sure have the candidates we deserve.
So, just to be clear, your cynicism in no way represents some universal truth. And having your candidate in the White House has real value otherwise people wouldn't spend $1B+ to get there. The fact is, had Bernie won, it would have meant significant progress for the issues his supporters care about. I really don't understand your comment. No one expects it to be easy. Every change has only come in increments. Your derision for people engaged in the political process is wholly unjustified and reflects poorly on your thought process.
I'm definitely a cynic, but that post was based entirely in fact.
A presidential appointment is very important. They nominate Supreme Court justices (although the new rule for the senate is apparently refusing to vote on/approve of nominees if the president doesn't belong to your party.) They have veto power over laws, and can force a supermajority. They do have some level of control over military actions (not enough to unilaterally start World War 3, but still.)
But they do not have absolute control. If Bernie wants universal healthcare, he'd have to get congress to pass it. The same congress that barely passed the insurance industry's dream legislation created by the Republican party in the first place. You think that congress is going to pass single payer? Or free college education? Keep dreaming. Sure, if we elected 60 senators like Bernie Sanders, we might be able to do something amazing. But Bernie alone? Not enough. Obama couldn't even shut down Guantanamo Bay.
Don't get me wrong, I'd have been elated for Bernie to have won the election. It was obvious in 2008 with Obama's reversal on marriage equality that he was just another career politician. Clinton is far worse than even Obama. Bernie was the first candidate I actually believed meant what he was saying. He had an entire lifetime of advocating for the change he spoke of. But you're hopelessly naive if you think he could have actually brought about the things he wanted.
How does AT&T even have $80B. They have been irrelevant for many years.
On the flip side I guess it makes sense that a big media company is on the rails. For media companies it's hard to make a living in the new economy. (Virtually) no one buys magazines these days so Time is irrelevant. And most people are pirates so being a movie studio is likewise a dead end vocation. They're lucky to find someone that wants to buy them. The price is absolutely enormous. Again, where on earth does AT&T have this sort of money.
I'm fairly confident you have a very unrealistic/limited/biased view of reality: most people are not pirates. The virtually extinct magazines can still be seen on millions of points of sale every day around the world and if they're there with new stocks and content every day/week/month then they're still very widely sold.
AT&T is a $226b corporation and time warner productions is a $73b who just got bought for 80.
[1] https://en.m.wikipedia.org/wiki/Time_Warner
[2] https://en.m.wikipedia.org/wiki/Time_Warner_Cable
[3] https://en.m.wikipedia.org/wiki/Acquisition_of_NBC_Universal...