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Expert: AT&T-Time Warner merger won’t change local cable consumption

Creative Industries
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As fallout from the proposed merger of AT&T and Time Warner ripples through the communications industry, at least one local media expert says that regardless of the outcome of the deal, area cable customers will see few changes in their day-to-day consumption.

“People in Columbia, South Carolina, the Time Warner they know is Time Warner Cable, and this is not that company,” said Augie Grant, a professor of journalism at the University of South Carolina who has studied Time Warner and AT&T for decades. “It’s easy to be confused.”

Late Saturday, AT&T announced plans to buy Time Warner for $85.4 billion in a combination of cash and stock. The deal, which would be the biggest in the world this year, is expected to close by the end of 2017.

“It’s a great spectator sport and there’s billions at stake, (but) for the local Time Warner customer, this isn’t going to make a difference,” Grant said.

Time Warner Cable separated from Time Warner, owners of Turner Broadcasting System, CNN and HBO, in 2008. Time Warner, which also spun off Time Inc. in 2013, is now strictly in the business of making content, Grant said, which it distributes through various companies including Time Warner Cable, DirecTV and Comcast.

“Time Warner is not the Time Warner we had 10 years ago,” Grant said. “Time Warner just packages things into channels. … The concern is if AT&T now owns CNN, could they either keep CNN off other channels or could they control the content of CNN?”

There is significant precedent to show that won’t happen, Grant said. When Comcast bought NBC in 2011, Comcast had to give up day-to-day control of video website Hulu and make NBC programs available to other streaming services.

Content availability agreements are standard, Grant said, and added that corporate ownership of networks actually can lead to increased watchdog Grantcoverage because of transparency concerns. He pointed to bribery charges against former NBC parent General Electric that actually received more coverage on NBC than other networks as an example.

Cable customers shouldn’t expect CNN’s historical editorial independence to change, Grant said. AT&T’s greater access to content if it buys Time Warner, however, could lead to some discernible differences, with the wireless giant thinking “How can we more easily experiment with new ways of delivering things?” Grant said. “Will that give AT&T a greater opportunity to put Game of Thrones on phones? It will.”

Analysts say media content companies are facing increasing struggles as stand-alone entities, creating acquisitive opportunities for telecom, satellite and cable providers. In July, Verizon announced plans to acquire Yahoo’s core internet business for $4.8 billion, and Verizon CEO Lowell McAdam praised the pending AT&T/Time Warner deal, saying “it makes very good sense for AT&T.”

The proposed purchase has created a stir among industry observers and presidential candidates concerned about consolidation of power. The deal will be reviewed by the Justice Department, but AT&T said it’s unclear if the Federal Communications Commission will have to approve the purchase because the companies have not decided which FCC licenses will be transferred to AT&T.

“Nothing’s a foregone conclusion,” Grant said, recalling Fox’s failed attempted to buy Time Warner in 2014. “There will definitely be regulatory scrutiny. Another company could come in and say, ‘We’ll pay even more.’ A lot can happen between now and the time everything is wrapped up.”

Contact Melinda Waldrop at 803-726-7542.

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