AT&T is reportedly preparing for a major media purchase, with Time Warner touted as the likely target. Such a deal would enable the US telecoms giant to push even further into content, building on its US$48.5bn merger with satellite TV provider DirecTV.
AT&T (NYSE:T) is reportedly preparing for a major media purchase, with Time Warner (NYSE:TWX) touted as the likely target.
The New York Post cited sources saying that the US telecoms giant is “circling” media and entertainment behemoth Time Warner.
While AT&T is already testing the waters with content, hedge fund managers are sceptical that it could afford such a big target so soon after its US$48.5bn purchase of satellite TV provider DirecTV, the report stated.
AT&T has declined to comment.
The telco could be interested in Time Warner’s Turner Broadcasting business, which includes the TBS and TNT networks, Turner Classic Movies, CNN and the Cartoon Network, the report suggested.
AT&T CEO Randall Stephenson (pictured) was cited extolling the virtues of the DirecTV merger, which closed last July, at the World Economic Forum last week, as well as outlining the company’s content plans.
Stephenson told CNBC that, six months into the integration process, the company is now even “more enthusiastic” about DirecTV. The purchase of the DTH operator has afforded AT&T access to streaming rights, as well as movies, TV shows and live sport.
Earlier this month, AT&T announced that it would reintroduce unlimited data plans for those who subscribe to its U-verse home TV offering or DirecTV’s satellite TV service.
Stephenson explained that the company has been boosting its store of spectrum to support the unlimited data plans.
“The bet we made … was TV everywhere is going to be very, very important,” he was cited saying. “People have been pursuing TV everywhere for a long time. I don’t think anybody has really executed on it very well.”
The CEO said he thinks Netflix has done the best job in this respect, allowing customers to watch video anytime, anywhere with a “nice user interface” across devices.
Meanwhile, the Wall Street Journal cited Stephenson saying at Davos that recent stock market volatility and industry turmoil will present opportunities for telcos to do M&A deals.
“When an industry goes through change, the parts move around and M&A does tend to happen,” he was cited saying.
AT&T has a joint venture, Otter Media, with The Chernin Group to develop content for video services.