Past Media Mergers Could Pave the Way for Historic AT&T/Time Warner Deal

In a YouTube video released Saturday, communications giant AT&T announced plans to purchase media conglomerate Time Warner for $85.4 billion.The merger will see AT&T, which purchased DirectTV last year, take over Time Warner and its vast array of content-producing subsidiaries, including HBO, CNN, and DC Comics. In the video, AT&T CEO Randall Stephenson proclaims: “the media and communications industries are converging.” 

This statement, while true, is not unique to the AT&T/Time Warner deal.

Both Stephenson and Time Warner counterpart Jeff Bewkes have been eager to portray the deal as a transformation of both the telecom and entertainment industries, with the ability to streamline content delivery services by tapping into AT&T’s existing subscriber base. “The future of mobile is video, and the future of video is mobile,” Stephenson claims. By investing in a content service, “AT&T is betting that a few vertically integrated platforms will dominate the future of viewing,” says the Australian Financial Review.

The pending AT&T/Time Warner merger hasn’t been the only deal meant to marry content companies with those that distribute it. It is, instead, part of a larger trend taking place across the media industry in which companies on both sides of content creation and delivery are taking steps to gain access to the viewers and programming they each need to survive.

As the AT&T/ Time Warner merger will now face an uphill battle against political critics and federal regulators, here are some of the media industry’s biggest mergers between content creators and distributors that could pave the way for this historic deal.


In a merger that is arguably the most similar to the AT&T/ Time Warner deal, Comcast’s 2011 purchase of NBCUniversal was a kickstart for cable companies facing a slowly-dwindling subscriber base. The deal will likely serve as roadmap for both executives and regulators looking to get a handle on vertical integration in the AT&T case.

Just as AT&T will gain Time Warner’s vast catalogue of content, Comcast gained access to NBC’s media library with its purchase, including that of NBC’s 11 subsidiary networks, and NBC’s entertainment and movie divisions at Universal.

As Wharton’s Knowledge@Wharton journal points out, Comcast’s takeover of NBC also made it a pioneer in online streaming. Comcast was able to keep NBC’s 30 percent stake in Hulu in the final agreement, with only some limitations from regulators.

Not without its hiccups, the Comcast/NBCUniversal deal has largely been a success for both sides. Though ratings for NBC’s Olympic coverage this year were abysmal, Comcast’s third quarter reports showed growth, thanks to the online streaming services provided in conjunction with NBC.


While Verizon is one of the biggest telecommunications competitors to AT&T, it has pursued a decidedly more web-based strategy for expanding its user base. In the past few years, Verizon has invested in online content providers, like AOL and Complex Magazine, which can expand Verizon’s revenue base by connecting users with more closely-targeted advertisers.

Over the summer of 2016, Verizon spent $4.4 billion to purchase internet giant Yahoo! Inc. Though the final proceedings of that purchase are likely being held up following news of Yahoo’s recent historic data breach, Yahoo joins AOL in Verizon’s portfolio of content-driven websites that will soon likely include video streaming to expand Verizon’s reach to mobile users.

Yahoo also spent the summer investing in its business-to-business wing, including notable investments in Fleetmatics and Telogis. These two telematics firms will likely help Verizon expand its partnerships with auto manufacturers, and some speculate that Verizon will make the move into the self-driving car marketplace soon.

Ultimately, like Comcast and AT&T, Verizon appears to be taking steps to avoid the “dumb pipe” problem by partnering with content companies to curate services and products that will grow its user base.

Disney? CBS? Netflix? Twitter?

Now that Time Warner has been matched with its delivery counterpart, media experts have begun to speculate on which companies will merge next.

In September, the owners of CBS and Viacom, Shari and Sumner Redstone, sent letters to each of the companies instructing them to explore a possible reunification of the entangled networks. While neither company is a dedicated content distributor like AT&T or Verizon, the Redstones are hoping that CBS’s leadership as well as its online-streaming platform can save the floundering Viacom.

Meanwhile, Disney, once an untouchable entertainment giant, has been struggling with falling revenue at its ABC and ESPN networks. Speculation over their renewed interest in purchasing Twitter drove stock prices for the social media site up 4 percent on Wednesday.

There has also been widespread speculation over what company might move to buy out Netflix. The streaming powerhouse is a serious threat to telecom companies hoping to make a dent in the online streaming realm, and would be a huge asset to content-producing companies who could use Netflix’s expansive subscriber base to distribute their media.

A Path for AT&T/Time Warner

For now, it doesn’t look like AT&T will be making more bids any time soon. On Tuesday, AT&T announced the prices of its own forthcoming internet TV service, DirecTVNow. Not to mention, securing its purchase of Time Warner will take considerable effort in months to come.

While the deal between AT&T and Time Warner is historic, if only for the massive size and reach of both companies, it is clear from the above cases that it is nothing new. Decades of media mergers matching content creators with distributors, and reshuffling companies to reach consumers, have preceded the most recent pairing.

As the saying goes, history repeats itself. If this can ring true for the media industry, these prior content/distributor deals could pave a path to success for both AT&T and Time Warner.

Lauren Shiplett contributed reporting.

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