AT&T promises ‘fresh approach’

The boss of AT&T has promised to bring a “fresh approach” to the entertainment industry after the US telecoms firm completes its US$85.4bn acquisition of Time Warner, parent company of Warner Bros, HBO, Turner and CNN.

Randall Stephenson

The deal, which was first proposed more than 18 months ago, received the green light from a US federal judge earlier this week after he rejected a government attempt to block it.

AT&T chairman and CEO Randall Stephenson described the content and creative talent at Warner Bros, HBO and Turner as “first-rate” and said that, combined with AT&T’s distribution network, the enlarged company would offer “a differentiated, high-quality, mobile-first entertainment experience.”

“We’re going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors and advertisers,” he added.

Time Warner chairman and CEO Jeff Bewkes will remain with the company as a senior advisor during a transition period, AT&T added, with the acquired assets falling under the telco’s media and entertainment division, headed by John Stankey.

AT&T, which is to rename its media division, also includes a communications division, an international arm offering mobile and pay TV services in Latin America, and an advertising unit.

The decision to approve the takeover is expected to open the gates to a flurry of high-level M&A activity, in particular paving the way for a major battle between Comcast and Disney for 21st Century Fox as they attempt to battle Netflix and Amazon.

The US Department of Justice (DoJ) had claimed AT&T, which owns satellite TV platform DirecTV, could end up charging rival distributors more for Time Warner content, resulting in higher prices for consumers.

But Judge Richard J Leon of the US District Court in Washington said the DoJ had failed to prove its argument that the acquisition would lead to fewer choices for consumers and higher prices for TV and internet services.

Instead, he accepted the position of AT&T and Time Warner execs: that content creation needed to be increasingly married with distribution for media companies to survive in a world dominated by tech giants.