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Traders work at the post where Time Warner is traded on the floor of the NYSE in New York
Traders work at the post where Time Warner is traded on the floor of the NYSE in New York. REUTERS/Brendan McDermid

Judge Rules in Favor of $85.4 Billion AT&T and Time Warner Merger

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Traders work at the post where Time Warner is traded on the floor of the NYSE in New York. REUTERS/Brendan McDermid

A United States federal judge has ruled in favor of the AT&T and Time Warner merger.

This decision was in direct opposition to the Justice Department’s wishes over the $85.4 billion deal.

U.S. District Court in Washington

Many expect that the decision of the Federal Judge Richard J. Leon of the U.S. District Court in Washington will open the floodgates for corporate takeovers. Judge Leon explained that the Justice Department had not adequately proved that AT&T’s acquisition of Time Warner would bring about reduced choices for consumers. He added that the Justice Department was unable to prove that the outcome would be higher prices for internet and television services.

This merger will form a massive telecommunications supergiant, redefining the television and industry ecosystem. Together, the company they form will contain a tremendous library of channels such as CNN as well as shows such as HBO’s exceptional success, “Game of Thrones.” This will be combined with the considerable satellite television and wireless services network across the United States.

Competing With Netflix and Amazon

It is becoming increasingly commonplace for media executives to say that distribution and content creation must be combined if tech companies are to compete with Netflix and Amazon. Both of those companies have had a significant head start in producing their own shows. They have been doing so for years. To do this, they have spent a total of billions in original programming. This allows their subscribers to stream the original content over their apps on computers televisions and mobile devices.

The pressure this has placed on traditional media giants is considerable. Moreover, cable television providers and networks have been desperately trying to compete with those offerings. These more traditional companies have been working hard to try to come up with a way to compete.

More Mergers

For many of these companies, the solution has been mergers. This has brought about considerable attempts by companies to buy out giants that would make it possible to pool resources and accomplish what the newer players have managed to do.

For instance, Comcast had been in hot pursuit of some of 21st Century Fox’s assets. The Walt Disney Company had been after some of the same assets. Comcast, however, held off from completing a formal bid until the AT&T and Time Warner trial had a ruling.

Note: The opinions expressed in this article are the author's own and do not necessarily reflect the view of Alvexo on the matter.