The future for thousands of CNN and other Turner Broadcasting employees in Atlanta is slightly less uncertain after waiting more than a year and a half to see if AT&T really buys Time Warner.
They at least now know that the purchase and a broader remake of the media landscape is almost certainly coming. What it means to their jobs and futures is still unsettled.
A federal judge on Tuesday thrashed the U.S. Justice Department's attempts to block AT&T's purchase of Time Warner, the parent of Turner, HBO and Warner Bros.
The Trump Administration, which had raised antitrust concerns, could appeal, but the judge urged it not to attempt to halt the deal in the meantime.
Expect other telecom and media players to be emboldened to gobble up more of the landscape, too. That’s likely to mean fresh competitive pressures for Turner.
Had the deal been blocked, Time Warner could have pursued alternatives that might have satisfied shareholders but ultimately been tougher on employees.
One option: selling or spinning off Turner, home of CNN, TBS, TNT, Cartoon Network and other media properties. That could have made Turner an independent company for the first time since 1996, when Ted Turner ran the show.
It probably wouldn’t have created long-term stability for workers, though. Media companies are getting bigger, not smaller.
“The trend in the industry is that scale is important,” said Scott Robson, a research analyst for media research firm Kagan.
Turner ultimately would have been a buyout target for other TV-focused businesses, ones that could have overlap with people already at Turner, Robson said. That’s red meat for job cuts.
It’s possible AT&T also could lead to cuts at Turner. People I talked to outside the company wondered about areas like accounting, legal and real estate.
The takeover by a telecommunications company is unnerving for some Turner employees, but the differences in the businesses might mean fewer jobs are threatened by “synergies.”
That’s assuming AT&T, the owner of DirecTV, treats all Time Warner’s pieces as if they were worth the fight it waged to get them.
Turner folks should be proud, as I wrote when the AT&T/Time Warner deal emerged in 2016. Despite more competition and serious bulldozing of the media landscape, what they produce is still lucrative and in demand … "pretty impressive, given that Ted Turner launched CNN 36 years ago (which is like 279 in media industry years)."
Turner accounts for well over a third of Time Warner’s revenues and more than half its operating profits.
The unit has more than 12,000 employees around the world. Atlanta is still a big center for the company, which owns nearly 2.5 million square feet of space in downtown and Midtown, though most senior Turner leaders and most CNN news shows are no longer based here.
“Turner is a pretty strong player right now,” Robson told me.
It has years of rights to NBA games (for which it pays $1 billion annually). The TNT network commands some of the highest per-subscriber rates from cable providers. And CNN sits among cable’s most watched networks, though it generally gets lower overall ratings than both Fox News and MSNBC.
Still, while Turner’s revenue rose last year, the number of subscribers with access to its TV networks fell. So did advertising, in part due to audience dips for Turner’s entertainment networks, according to Time Warner filings.
Movies on cable entertainment networks have been slipping. Netflix, Amazon and others are enticing viewers.
So you get why Time Warner would worry: people have gone rogue in their viewing habits.
AT&T isn’t a quick solution for that, but it’s something.
Turner leaders want the mobility giant to share information about its customers.
“All the video growth in next five or 10 years is going to come from mobile … and to have 130 million mobile relationships I think could be hugely interesting,” Turner chief executive John Martin told me last year.
The judge noted Turner’s disadvantage in his ruling: unlike competitors Netflix, Hulu and Amazon, Turner doesn’t have access to much information on its viewers. It also has a disadvantage in offering deeply targeted advertising compared to Google and Facebook.
But the Justice Department predicted that combining AT&T and Time Warner’s Turner would lessen competition and cost consumers more. Turner, the government argued, could pressure other cable and satellite providers to pay more to carry its networks or risk Turner’s withholding choice programming. Unhappy cable customers might then be motivated to switch to AT&T’s DirecTV.
You won’t be surprised that AT&T insisted otherwise.
Consumers — and our neighbors at Turner — are closer to figuring out whether trusting AT&T is smart.
But this is only the end of the beginning.
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