The news at a glance
Entertainment: AT&T calls it quits on media
In a stunning “about-face from its $85 billion purchase of Time Warner in 2018,” AT&T said this week it would spin off its media assets and merge them with Discovery, said Edmund Lee and John Koblin in The New York Times. The combination of HBO, Warner Bros. studios, CNN, and several other cable networks with reality-based Discovery channels such as HGTV and the Food Network will create the second-largest media company in the United States. The new company, trailing only Disney in size, plans to spend $20 billion a year developing content to compete with Disney and Netflix. Discovery’s chief, David Zaslav, will oversee the new venture, while AT&T goes “back to being a purely telecommunications business.”
All that wasted time and money is tough to swallow, said Tara Lachapelle in Bloomberg.com. AT&T “fought tooth and nail” against the Justice Department to complete the Time Warner merger and create the scale it believed it needed “to be able to compete with Google, Amazon, and Apple.” It was so proud of the accomplishment that it gave executive John Stankey a special bonus for completing the deal—and later made him CEO. Yet ever since, AT&T has struggled to explain its rationale for “a remarkable strategic shift that launched the ultra-profitable wireless carrier into the ultra-unprofitable world of streaming TV.” Now it’s stuck with unwinding a merger that’s a textbook example of corporate overreach.