Over the years Time Warner Cable has become a world leader in cable telecommunications, the company currently located in New York City holds numerous assets including CNN, HBO, TNT, and Warner Bros.
For months, there had been rumors circulating about the possible acquisition of Time Warner by various companies. Notably, it had been speculated that Apple was making a legitimate push to create a merger between the companies.
There has been many questions raised regarding the telecommunications industry, partially due to the previously unknown future of Time Warner, but also because of the paths forward that Google and Apple are looking to build. It has been a growing expectation that the two giants could possibly be looking to acquire popular companies which provide content programming, Time Warner obviously being one of those companies.
The cost has been set at a whole, $85.4 billion certainly a very large figure. Time Warner Cable CEO Jeff Bewkes said of the situation, “You’re going to see all kinds of distributors following,” he added when speaking to reporters via conference call, “And you’re going to see a kind of revolution in the TV world.”
This move comes with the long held belief that these companies have been looking for this type of merger as the growth of the sale of smartphones begins to even off. As a result, companies have been looking everywhere for possibilities to further grow this market, something that content companies may be able to provide.
This comes in many ways to compliment a deal AT&T made just last year to purchase DirecTV for $48.5 billion. With this, they have been able to effectively transition to the sales of the service and to create a streaming service (which is still being developed). With this service, customers will be able to stream content to their smartphones without having to worry about going over data limits. This is important with Time Warner holding the rights to Harry Potter, CNN, NBA games airing on TNT, MLB games airing on TBS, and numerous other popular programming options.
With this, it will be easier to readily carry these programs without having to negotiate oftentimes expensive contracts in order to carry these options which are very popular with many consumers. This will lead to not only having to pay Time Warner, but it will also assure that they do not have to worry about not being to meet the demands of consumers in these particular areas.
Despite the deal being in place, there are still lingering questions about the finalization. With companies this large, federal regulators will likely be required sign off on the merger. As was evident with Comcast’s previous purchase of NBC Universal, they may require certain provisions to be put in place to follow through.
Interestingly, the election may play a role in this merger and others. Republican President Nominee Donald Trump stated that if elected he would not want the acquisition to occur. He spoke of the deal by saying “deals like this destroy democracy.”
(h/t USA Today)