Making Sense of AT&T’s Bid for Time Warner
'“You had a lot of people saying you should’ve combined a donkey with a rabbit and gotten a flying unicorn.”
That was how Jeffrey Bewkes, the chief executive of Time Warner, once described his company’s colossal failure of a merger with AOL. He spent the last decade dismantling much of his company in the name of “focus,” spinning off his cable business and magazine empire.
And yet over the weekend Mr. Bewkes agreed to sell Time Warner to AT&T for $85 billion in a deal that, if approved by regulators, will vastly reshape the media and telecommunications world — and ultimately the way Americans will consume and pay for their favorite television shows.
There was a good reason that Mr. Bewkes had been skeptical of big mergers that combined distribution and content: They are complex and hard to make successful, and they invariably face enormous headwinds from regulators, who will undoubtedly tie their hands in an effort to protect consumers from anti-competitive behavior.
“Let’s be honest, prices aren’t going to go down because of this,” said Rich Greenfield, a media analyst at BTIG Research. “I don’t think vertical integration lends itself to consumer benefits.”'>>>
http://www.nytimes.com/2016/10/24/business/making-sense-of-atts-bid-for-time-warner.html?