A new AT&T merger unwinds a previous one

Over the weekend, a massive merger agreement was hammered out between telecom giant AT&T and entertainment company Discovery Inc. If it receives the blessing of federal regulators, AT&T will spin off its WarnerMedia unit—which includes CNN, HBO, and other assets—into a separate company that it will co-own with Discovery. The usual descriptions followed: it was a merger made in heaven (Discovery chief executive David Zaslav said the two “fit together like a glove”), with numerous synergies, and would create what the New York Times called “a juggernaut.” As Paul Farhi, Washington Post media reporter, pointed out following the news, a number of deals over the past two decades were described in similar terms, including the merger of Time Warner and AOL in 2000, in a deal that was worth about $165 billion at the time. It was later unwound, with Time Warner taking a massive write-down and spinning off AOL as a separate company. Despite the hyperbole, a number of analysts and media industry experts believe the deal represents an admission of failure by AT&T. The company said it planned to buy WarnerMedia in 2016, and spent the next two years fighting with competition regulators for approval to do the deal. The acquisition was finally approved in 2018, and AT&T bought the company for $85 billion, which it heralded as the start of a new media and entertainment empire. The unwinding of the deal is “a major course correction,” Axios wrote about the new arrangement.... Continue reading at 'Columbia Journalism Review'

[ Columbia Journalism Review | 2021-05-18 12:05:33 UTC ]
News tagged with: #vanity fair #liz gough #axel springer #lifestyle magazine #editorial teams #time warner

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