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A Federal Judge ruled last Tuesday that the $85.4 billion acquisition of Time Warner by AT&T was allowed to move forward. The anti-trust suit brought by the Department of Justice last year sought to prevent the merger. In their filing the Justice Department sited concerns AT&T would be given too much control over raising costs on consumers, but on Tuesday U.S. District Judge Richard Leon disagreed and allowed the merger to move forward.
A Mega-Merger for the Ages
The deal which closed last Thursday, combines AT&T’s ability to distribute content as an internet service providers with Time Warner’s vast catalogue of premium content. The properties AT&T has now acquired include HBO, Warner Brothers Studios, D.C. Entertainment, CNN, TNT, and TBS, among others. AT&T is also the owner of Direct TV.
A Necessary Move for AT&T
In a memo sent to all employees, AT&T CEO Randall Stephenson said AT&T was now ‘a truly modern media company’. This evolution was necessary to compete with the likes of Facebook, Amazon, and Google in the internet age. AT&T is now in position to do so and will distribute Time Warner’s vast catalogue of content across its broadband and mobile networks. The deal makes AT&T one of the only major internet service providers to own an extensive library of content. In direct competition to AT&T however, is Comcast who now owns NBC Universal and is making a strong play for Fox.
Content is King
The ruling – and subsequent deal – is expected to cause a ripple-effect across the entertainment and tech landscape as several other mega-mergers will now likely move forward in order to compete with the likes of Netflix, Amazon, Google, and Facebook. First among them is the reported purchase of Fox by Disney for $52.4 billion. However, as referenced above, this deal is now being called into question as Comcast has made a counter-bid for Fox to the tune of $60 billion. If the Disney-Fox deal does go through, the Mouse-House would own the likes of Star Wars, Marvel, Pixar, Avatar, and both company’s full catalogue of content.
In another interview Friday, Stephenson announced AT&T would be offering a ‘very, very skinny bundle’ of free television programming to its mobile customers. Whether or not the deal will re-shape the media landscape in the long run remains to be seen, but at the moment, at least around AT&T, hopes for such change are very, very high.