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Brace yourself for the likely new era of media megamergers.
AT&T's victory over the government's attempt to block its $85 billion takeover of Time Warner underscores just how much the way people watch TV—and pay for it—has changed. It also highlights how corporate America wants to adapt to deal with its new environment. In short: Bigger is better.
Government - Merger - Competition - Lead - Cable
The government argued that the merger would stifle competition and lead to higher cable bills. But U.S. District Judge Richard Leon ultimately agreed with AT&T's assertion that it had to grow to survive in the era of Google, Amazon and Netflix.
"It really was a stunning rebuke of the Department of Justice," said media analyst Craig Moffett. "Judge Leon was wholly unpersuaded by their case."
Ruling - Floodgates - Worlds - Entertainment - Production
The ruling could open the floodgates to deal making in the fast-changing worlds of entertainment production and distribution. Major cable, satellite and phone companies are bulking up with purchases of entertainment conglomerates to compete against rivals born on the internet such as Amazon and Google.
Waiting in the wings are potential big-billions deals involving 21st Century Fox and Disney, Verizon and CBS, T-Mobile and Sprint. Comcast and Verizon are also jockeying for position in the new landscape.
AT - T-Time - Warner - Boost - End
A combined AT&T-Time Warner could also get a boost from the official end of net neutrality —the Obama-era rules that barred broadband and wireless companies from favoring their own services to the detriment of rivals like Netflix. As of this past Monday, AT&T and Verizon can prioritize their own movies and TV shows, to the likely disadvantage of rivals such as Amazon, YouTube and future startups.
The judge's decision frees the wireless and pay-TV giant to absorb the owner of CNN, HBO, the Warner Bros. movie studio, "Game of Thrones," coveted sports programming and other "must-see" shows.
Result - Consumers - Options - AT - T
The result for consumers? More options, especially if they're AT&T customers...
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