Three years ago, AT&T took part in what was considered the largest media deal in the world. It bought WarnerMedia for $85.4 billion. This meant that AT&T now owned HBO, CNN, TBS, TNT, Cartoon Network channels. It also attained Turner Classic Movies and Warner Bros. film and TV studio.
Bad Timing
But it turned out that this purchase at the time was not one of AT&T’s wisest moves. Acquiring a giant media deal while investing over $105 billion into 5G internet expansion goals took AT&T into a lot of debt. This debt started affecting the company’s ability to focus on what really mattered. “Connectivity is at the heart of everything we do – 140 years and counting. From our fiber network backbone to the layers of wireless spectrum technology, we provide 5G network coverage that delivers the speeds, security and lower latency connections that customers and businesses need. Over the past five years, AT&T has invested more capital in the U.S. than any other public company.” That was the voice of Jeff McElfresh, who is the CEO of AT&T Communications.
AT&T Merges WarnerMedia with Discovery
In hopes of relieving some of its debts, AT&T decided to spin off. It officially announced its new deal in which it will merge WarnerMedia with Discovery Inc. Now, WarnerMedia mega-channels is forming an alliance with the legendary channels of Discovery Inc. This includes Discovery Channel, HGTV, Food Network, TLC, Investigation Discovery, Travel Channel, Turbo/Velocity, Animal Planet, and Science Channel and OWN. Such an venture will most certainly give Netflix, Amazon and Disney+ some major competition.
This deal will give AT&T $43 billion. It will also give AT&T shareholders a 71% of ownership in this new merged company. Discovery shareholders will own the other 29%. AT&T’s Chief Executive John Stankey said in one of his releases, “For AT&T shareholders, this is an opportunity to unlock value and be one of the best capitalized broadband companies, focused on investing in 5G and fiber to meet substantial, long-term demand for connectivity.”
Broadband Is Still It’s Main Goal
John Stankey assured AT&T’s investors that broadband internet really is its main focus. “Our goals with the new AT&T are simple and straightforward. We plan to continue the momentum in our mobility business by stepping up our investment in our wireless network. We expect to effectively deploy the assets we acquired during the recent C-band auction, reaching 200 million PoP with that spectrum by the end of 2023.” Looks like AT&T will continue focusing on giving its telecom giant competitors a good run. It is back in the race to expand and own the most worldwide 5G power.
