AT&T’s next step to telecom dominance? Buying Time Warner, it seems. Before the next episode of Westworld airs, theoretically, AT&T could own HBO, CNN, Hulu, DC Entertainment and Warner Bros. Pictures among others, according to The Wall Street Journal. Over the past few years pretty much any multibillion dollar corporation has flirted with the idea of buying Time Warner. Apple and Fox have both been heavily rumored, for example. And considering that Time Warner turned down $80 billion from the latter, it gives us an idea that the asking price is going to be northward of that.
Consolidation in the media landscape (oh hi, Verizon) is increasingly commonplace as companies look to bolster their bottom line with bigger customer numbers over individual profits. After all, that cable subscription’s going to get a lot cheaper when people start cutting the cord en masse in order to try winning you back. Just look at the price of monthly landline service as a parallel.
But last year’s $49 billion acquisition of DirecTV has left the coffers a bit dry, and its last investors report stated that the company only had about $5 billion in free cash. If the deal goes through, it’s going to leave the company pretty deep in the red. Or AT&T manage to raise the GDP of a small somehow just to afford the purchase price. But hey, corporations are good with math, right? The beancounters will make this work. Somehow.
Source: Wall Street Journal