Current Events, Makayla Johnson, News

A Breakdown of the AT&T-Time Warner Merger

By Makayla Johnson

AT&T and Time Warner have officially decided to join forces in the media realm. AT&T, the second largest cellphone carrier bought Time Warner, owner of CNN, HBO and TNT for $85.4 billion.

Both companies shared their optimism about the deal. Chairman and CEO of AT&T, Inc. Randall Stephenson pointed out “When it comes down to it premium content always wins. It’s been true on the big screen, the T.V. screen and now it’s proving to be true on the mobile screen. Our goal is to give customers unmatched choice, quality, value and experiences that will define the future of media and communications.”

“As we continue to tell the world’s best and most important stories, I’m really excited about the future we’re going to help create with AT&T,” says Jeff Bewkes, Chairman and CEO of Time Warner, Inc.

The vertical merger, or two firms in different industries, will be a benefit customers by granting access to new premium content on all devices. AT&T will also become the first mobile carrier in the U.S. to compete with cable companies by selling broadband and video bundles.

While some are excited about the marriage, others are on the fence. Some potential cons of the merger could be exclusivity of content, consumer privacy and higher prices for customers. Wall Street is also on the fence and “investors seem worried that AT&T may be spending too much for Time Warner and that the financial and strategic benefits won’t be as significant as Stephenson plans,” says a CNNMoney article.

Although some are not certain of the direction of this merger and what this means to them, AT&T and Time Warner insist their customers are in safe hands.

Stephenson says plans for closing the transaction will be by the end of 2017.



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