AT&T is a massive distribution network of cable and satellite television, as well as wireless phone communications. In contrast, New York-based Time Warner is a veritable juggernaut of content, including CNN, HBO, Cartoon Network and Warner Bros.
The companies, which announced the deal Saturday night, argue their respective assets are complementary rather than competitive. (Time Warner sold off cable TV unit Time Warner Cable in 2009, and that later folded into Charter Communications.)
Still, the agreement must get past what is expected to be a tough federal review. Regulators could compel the company to accept some conditions while still giving consent.
The purchase would also include nearly $20 billion in Time Warner debt that AT&T would assume.
AT&T stock fell 1.6 percent Monday, following a 3 percent dip on Friday amid early reports of a pending deal. Time Warner stock fell about 3 percent, offsetting Friday’s 8 percent gain and suggesting investors have doubts.
Looking forward to a hoped-for federal approval, Stephenson said in an interview with CNNMoney that he believes CNN should remain independent.
“I think you can begin to destroy a brand like CNN if you begin to meddle in its independence,” he said. “We’re going to be very cautious.”
CNNMoney reported a number of other anonymous sources from inside the company affirming a steady-as-she-goes approach to Time Warner.
Still, during a Monday web conference with analysts and reporters, company officials touted the huge cost savings of a merger. And some departments seem destined to be melded with corporate operations that overlap.
For example, the corporate bean-counters can be expected to take a hard look at payroll, accounting, marketing, middle management and some of the centralized work of human resources.
less likely to be pared or moved are creative functions – partly because Atlanta has become a hub of creative work with a growing pool of talent.
But there are no guarantees, even in the short run.
Several months ago, NBC Universal completed its purchase of Dreamworks, the film production company. Officials talked about saving money by combining marketing, distribution, finance, legal and human resources. In September, Dreamworks cut 200 jobs, about 10 percent of its workforce.