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AT&T To Buy Time Warner For $85 Billion


We're going to start the program today with a major business story. One of the biggest media mergers in years could be announced this evening. NPR has confirmed that AT&T has agreed to buy Time Warner for $85 billion. The boards of the companies met this afternoon to approve the deal. The merger takes place at a time when consumers' viewing habits are rapidly changing and major media companies are struggling to adapt. We're joined now by NPR's Jim Zarroli. Jim, thanks for joining us.


MARTIN: So these are two iconic American companies. Can you just remind us about what each of them does today?

ZARROLI: Yeah, well, start with AT&T. This is not the company that everybody used to think about when we talked about the phone company. That company was broken up in the '80s into seven companies. One of those seven was Southwestern Bell, which later, after a bunch of mergers, took on the brand name AT&T. And that is the company that's doing this deal. It's a major wireless internet company, has millions of subscribers. It also owns the satellite company DirecTV. Now, Time Warner - Time Warner is really a content company today. It does movies and TV programs. It owns HBO and CNN and Warner Bros. studios. It used to be in the cable business, but it got out of that. Today it's largely a content provider.

MARTIN: So who initiated the merger, and why do these two companies want to merge? What do they hope to accomplish?

ZARROLI: Well, this is really a marriage of content and distribution. AT&T right now has access to, you know, millions of consumers because it sells internet and wireless and satellite service. Buying Time Warner means it also will have access to content that those customers want to see. You know, buying Time Warner means buying "Harry Potter" and "Game Of Thrones" and, you know, just lots of programs that customers want to see. So that could be a real advantage for AT&T going forward in terms of just holding on to and attracting customers.

MARTIN: Well, how do we think that AT&T would want to use the content that it acquires by buying Time Warner?

ZARROLI: You know, we don't know because I think the media business is changing so much. And people are giving up cable and they're watching programming on their smartphones and their digital devices. Young people in particular just have very different viewing habits. And in the past few years, there's just been this scrambling by media companies to figure out how to respond. I mean, you saw Comcast and NBCUniversal merge. You saw Time Warner get rid of its cable. So there's really no guarantee this is going to work. I mean, you just need to go back to the merger of AOL and Time Warner 16 years ago. I mean, at the time, that was just said to be this merger that would fundamentally reshape the media landscape, and it turned out to be a big disaster. I think the lesson is it can be hard for big media companies to get out in front of the changes that are taking place sometimes.

MARTIN: Well, we've already heard what - at least one major figure, Donald Trump, object to this deal. Can you just tell us a little bit about what the objections are that will be or likely will be raised to this? And the deal isn't supposed to take place until late next year. If it is approved, why will it take so long?

ZARROLI: Because these deals always have to go through, you know, regulatory scrutiny. In this case, there are reasons to think the government is really going to look at this one carefully. There are a lot of people who think that regulators should have asked more questions before approving the merger of Comcast and NBCUniversal. In that case you had, you know, this same kind of thing, a major cable and internet company merging with a content provider. So a lot of people think that the government should have been tougher. And I think just the atmosphere in general for these kinds of big mergers is changing. People are a lot more skeptical of them.

MARTIN: Thanks, Jim. That's NPR's Jim Zarroli. Jim, thank you.

ZARROLI: You're welcome. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Jim Zarroli is an NPR correspondent based in New York. He covers economics and business news.
Michel Martin is the weekend host of All Things Considered, where she draws on her deep reporting and interviewing experience to dig in to the week's news. Outside the studio, she has also hosted "Michel Martin: Going There," an ambitious live event series in collaboration with Member Stations.
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