So-Called Progressive CEO Has No Problem Pushing Through the Biggest Media Merger of the Decade
The AT&T-Time Warner Cable deal could mean a lot more than a price hike for your favorite television show. It's an issue of too much power in the hands of a handful of media executives.
The deal may allow America’s second-largest wireless company and third-largest broadband provider to “control both the pipes of distribution and much of the shows, movies, and other content that travels through the pipes," explained Brian Fung of the Washington Post.
But while AT&T would have drastically more power, Time Warner actually benefits far more from the deal. The biggest winner? Time Warner CEO Jeff Bewkes.
If [Bewkes] steps down after the deal closes [he] could walk away with cash and stock worth almost half a billion dollars," Marketwatch columnist Howard Gold wrote recently.
"Randall Stephenson, AT&T’s CEO, has to settle for a mere $22 million a year and the perks that come with being the latest in a long line of media empire builders," Gold noted.
Aside from media concentration questions, AT&T's Stephenson has cultivated a reputation that is fairly unique among Fortune 500 bosses. The average CEO doesn't use a company meeting to take a stand for Black Lives Matter and address the racial divide in America.
But the big issue at hand is the $85 billion recently announced deal, which will be the single biggest media merger of the decade. And Stephenson's main motive for pushing the merger is 5G video competition with cable companies.
“I will be sorely disappointed if we are not going head-to-head [with cable providers by 2021]," Stephenson said.
"The answer to what's in it for Time Warner is fairly obvious: lots of power and billions of dollars. Analysts have long believed that Time Warner CEO Jeff Bewkes has been preparing the company—a collection of businesses that make TV shows, movies and web sites, including CNNMoney—for a sale. What's in it for AT&T? Growth and power. The constant connectivity provided by the likes of AT&T is powerful and profitable, but so is content," CNN reported.
In a rare instance of bipartisanship, both Donald Trump and Bernie Sanders have denounced the deal. Likewise, Sen. Mike Lee (R-UT) and Amy Klobuchar (D-MN) of the subcommittee on antitrust issued a statement on the merger: “An acquisition of Time Warner by AT&T would potentially raise significant antitrust issues, which the subcommittee would carefully examine," their joint statement read.
Wall Street didn't much like the deal either, as shares of both companies dipped significantly Monday.
Will AT&T and Stephenson's ideology affect the culture of Time Warner and the companies it owns? As of late, Stephensen has only vaguely described the type of content he is pursuing.
“We believe premium content always wins—it’s not winning in mobile,” Stephensen said in defense of the deal. “We have now partnered and are working to combine forces with the top premium content creator…defining the future of media.”