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Time Warner chairman and CEO Jeff Bewkes and AT&T chairman and CEO Randall Stephenson on Monday touted their $85.4 billion cash-and-stock mega-deal on a conference call with Wall Street analysts, repeatedly suggesting it will bring benefits for content creators, among others.
Combining the telecom and entertainment companies will help creators “create more great content,” Stephenson said. And he said the enlarged company could develop new programming formats that other companies have been hesitant to adopt.
“There is the huge opportunity … to utilize consumer insights to inform content creation, and that allows us to continue to create not just the biggest hits, but also content and programming that really engages with targeted” niche audiences, Bewkes said. “We will develop new innovative business models and forms of content that consumers will be demanding tomorrow in this ubiquitous, multi-platform, on-demand and increasingly mobile environment.”
Bewkes on Monday also shared more thoughts on why his team separated Time Warner Cable from Time Warner a few years ago to focus on the video content business, but has now decided to merge content and distribution businesses again. Time Warner Cable was a regional company with “the limitations that cable had at that time,” he said, adding it needed to consolidate to get more efficient and he had felt that wouldn’t be accomplished as part of a media company.
“The world is much different now,” Bewkes, who famously had said about the failed AOL-Time Warner merger that promised synergies had been exaggerated before in 2014 saying that we’re seeing collaboration increase” at Time Warner, added in explaining about why he has become a fan of the idea of bringing content and distribution together under one corporate umbrella. “You now have net neutrality in place, you got broadband distribution, you have mobile as an ever-bigger part of the distribution package and you have a lot of incoming distributors or competition coming from Facebook, Netflix, Google, Amazon.” He concluded that having “distribution capabilities to innovate” is key in this time and age, and cable companies other than Comcast have often been too slow to do so.
The telecom giant unveiled the planned acquisition of the entertainment powerhouse for $107.50 a share in cash and stock, a premium of more than 40 percent to where TW’s stock traded last week, late Saturday, with the two moguls conducting a brief call with reporters.
“It’s the revolution of both of our businesses,” Bewkes had said on that call. “Whether it’s the movies, television series or an original show, we want our audiences to access them wherever they are, whenever they want, too. We think AT&T gives us tremendous access to do that.”
Meanwhile, Time Warner posted a video of Bewkes discussing the deal. “I want to share exciting news with you about the next chapter for Time Warner: the agreement we’ve entered into to be acquired by AT&T,” he says in it. “As you all know, over the past several years we’ve focused our company on the growing demand for high-quality video all over the world. And as we’ve done this, we’ve built a track record of creative and financial success that is second to none in our industry — and it’s something that each of you can be very proud of.”
He added: “With AT&T, we’re bringing together all our great television, film, games and digital content and we’re aligning it with their direct-to-consumer distribution across TV — including DirecTV — mobile and broadband in the United States and across Latin America. All told, AT&T has more than 100 million subscribers. This combination is going to put us in an even stronger position to go where our audiences are going: to a world with ubiquitous video-on-demand across all platforms and devices, giving people great experiences along with the brands and the content they love.”
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