It’s a marriage of distribution and content and it just so happens to combine two very prominent names in Atlanta’s corporate landscape.
Dallas-based AT&T’s $85 billion tie-up with New York-based Time Warner pairs a dominant telecom company, whose wireless division is based in Atlanta, with one of the world’s biggest entertainment companies, whose largest division, CNN-parent Turner, also calls Atlanta home.
That means potentially large ramifications for the region.
In a video message Time Warner’s 23,000 employees — of which about 5,500 are in Atlanta — CEO Jeff Bewkes sought to soothe any worries, saying that “the driving force of this transaction is not cost savings, it’s growth opportunity.”
“The value of our brands and businesses depends on the expertise of our people,” Bewkes said. “[Executives at AT&T] are very committed to retaining the talented people who have made us the best in the industry.”
AT&T Chairman and CEO Randall Stephenson struck a similar note in a conference call Saturday.
“I made it clear to Jeff that the talent he has assembled is a really important part of this deal,” Stephenson said. “It’s really critical to make sure the continuity of the team at Time Warner remains in place.”
Central Atlanta Progress CEO A.J. Robinson said much remains to be known about AT&T’s plans. But he noted Atlanta weathered the loss of major bank headquarters in decades past, such as C&S Bank and First Atlanta (which through series of mergers became Bank of America and Wells Fargo, respectively).
Turner itself ceased being a purely hometown company when Time Warner bought it in 1996, while BellSouth was gobbled up by AT&T. Both buyouts stung civic pride, but Atlanta proved resilient, he said.
As the home to AT&T’s mobile division, Robinson said Atlanta’s mobile communications sector will be hitched to Turner’s rich depth of content and intellectual property. And the film industry is one of Georgia’s post-recession economic stars.
“Atlanta is not dependent on any one particular industry,” Robinson said. “We always seem to make the best of both the good and the bad.”
The deal comes as the pay TV business, both for networks and distributors, has been upended by the Internet and the rise of streaming alternatives. Meanwhile, wireless service is maturing as the market for smartphones has become saturated.
Turner and its networks, shows and rights to sports such as NBA basketball, could help AT&T find new revenue and bulk up with content needed to have video everywhere — in homes and on smartphones. And with Time Warner’s Warner Bros. movie studio and HBO, AT&T also gets such franchises as Harry Potter, films from the DC Comics universe and hit series such as Game of Thrones.
In many mergers, job cuts follow the popping of champagne corks. But Robinson said he thinks the marriage with AT&T will be better for Atlanta than some alternatives, such as a 2014 offer from Rupert Murdoch’s 21st Century Fox that Time Warner spurned.
Many in Atlanta feared the deal might have come with deep cuts at Turner and perhaps the spin-off of CNN. Even though it failed, Turner slashed about 1,000 Atlanta jobs as Time Warner made the case to shareholders it was better as an independent company than as part of its archrival.
For years, CNN seemed to de-emphasize Atlanta, moving talent to New York. Turner’s top brass now are based in New York as well.
But Turner has continued to invest in Atlanta, recently announcing plans to update CNN Center and an overhaul of its main Midtown campus.
Earlier this year, Turner told employees it was “evaluating” upgrades to the office space and atrium mall at CNN Center, one of Atlanta’s top tourist destinations and a familiar entryway for events at Philips Arena. The company also announced plans to sell its 50 percent stake in the Omni hotel at the complex.
The planning coincides with negotiations between the city and Atlanta Hawks over extensive renovations to Philips, and as the Hawks consider potential development near the arena, which might incorporate CNN Center.
