“It would have been an amazing merger,” said David Barden, senior research analyst at Bank of America. “It would have somehow maintained AT & T’s growth juggernaut through acquisition – not organic – but it failed.”
Mr. Stephenson then looked at the attractive profit margins in the media and entertainment sectors. In 2014, he announced a deal for DirecTV, a deal he promised to “redefine the industry”.
But AT&T bought its way into the pay-TV industry at its peak. Not long after acquiring the satellite service, consumers were walking in droves.
“One thing they didn’t do – they couldn’t have predicted was that 2014 was the last year linear video would grow,” Barden said, referring to the cable television business. “Because who was out there in the wings? This little company called Netflix. “Customers started cutting their cables and cable subscriptions began to decline.
Then came Time Warner. Numerous analysts pointed out that owning a company that makes money by distributing shows and movies as widely as possible does not give AT&T an advantage. In other words, HBO and CNN would still need to be licensed to competitors like Verizon’s television service or cable giants like Comcast. AT&T would have a hard time keeping the contents to themselves.
The Justice Department sued AT&T for blocking the deal but lost its case in court.
Makan Delrahim, the former Justice Department antitrust chief who oversaw the lawsuit, said in an interview that AT & T’s widespread deal is a “classic case” of corporate misconduct. The company “went through a number of mergers and acquisitions and was not rational to do business,” he said, “T-Mobile, DirecTV and Time Warner. And this is the result. “
Mr. Whitacre, the founding chairman of the modern AT&T, offered a different view.
“The business we did when I was chairman – which was a long time – was taking over the companies we were familiar with, the companies we were in,” he said in an interview. “And when I left, that changed.”
Mr. Whitacre, who is still an AT&T shareholder, said he liked the Discovery deal and brought the company back to “where we come from if you will”.