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AT&T buying Time Warner for $85.4B

FILE - In this Tuesday, May 26, 2015 file photo, pedestrians walk by an entrance to the Time Warner Center in New York. On Saturday, Oct. 22, 2016, several reports citing unnamed sources said AT&T is in advanced talks to buy Time Warner, owner of the Warner Bros. movie studio as well as HBO and CNN. The giant phone company is said to be offering $80 billion or more, a massive deal that would shake up the media landscape. (AP Photo/Mary Altaffer)NEW YORK – AT&T is buying Time Warner, the owner of the Warner Bros. movie studio as well as HBO and CNN, for $85.4 billion in a deal that could shake up the media landscape.

The acquisition would combine a telecom giant that owns a leading cellphone business, DirecTV, and Internet service with the company behind some of the world’s most popular entertainment, including “Game of Thrones,” the “Harry Potter” franchise, and professional basketball. It’s the latest big media acquisition by a major cable or phone company – deals like Comcast’s 2011 purchase of NBC Universal, all aimed at shoring up businesses upended by the Internet.

Regulators would have to sign off on the acquisition, no certain thing. The prospect of another media giant on the horizon has already drawn fire on the campaign trail. Speaking in Gettysburg, Pennsylvania, GOP presidential nominee Donald Trump vowed to kill it if elected because it concentrates too much “power in the hands of too few.”

Sen. Al Franken, a Minnesota Democrat, said the deal “raises some immediate flags about consolidation in the media market” and said he would press for more information on how the deal will affect consumers.

Companies that provide phone and Internet connections are investing in media to find new revenue sources and ensure they don’t get relegated to being just “dumb pipes.” In addition to Comcast-NBC Universal, Verizon bought AOL last year and has now proposed a deal for Yahoo to build a digital-ad business.

After its attempt to buy wireless competitor T-Mobile was scrapped in 2011 following opposition from regulators, the company doubled down on television by purchasing satellite TV company DirecTV for $48.5 billion. AT&T is expected to offer a streaming TV package, DirecTV Now, by the end of the year, aimed at people who have dropped their cable subscriptions or never had one.

The venerable phone company has to contend with slowing growth in wireless services, given that most Americans already have smartphones. And it faces new competitors for that business from cable companies. Comcast plans to launch a cellphone service for its customers next year.

AT&T CEO Randall Stephenson, who will run the combined company, said the deal will allow AT&T to offer unique services, particularly on mobile, though he didn’t provide details. Jeff Bewkes, the Time Warner CEO who will stay with the company for an undefined transition period, added that more money will help fund production of additional programming and films. (AP)

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