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Phantom Roxas

Media conglomerates and mergers

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This is entirely speculation, but one of the possible outcomes of the appeal against AT&T is that WarnerMedia may have to divest their Turner assets. This was one of the structural remedies the DOJ initially proposed, and that seems to be something they're still pursuing if the appeal is successful.

 

It's important to note that it's specifically Turner that owns the remaining 10% ownership of Hulu. While it's a minority stake, I could very well see Comcast and Disney trying to obtain that stake. Turner also owns the broadcast rights to Star Wars, and Disney would love nothing more than to get those back. It's a long shot, but I would not put it past Disney to try to acquire Turner if AT&T is forced to divest it.

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I should probably add that Disney likely would not be able to acquire Turner as a whole. The best way to look at it is how the Disney/Fox and AT&T/Time Warner mergers contrasted. The DOJ wanted AT&T to divest Turner, and was more willing to approve the Disney/Fox merger because they saw the divestiture of certain Fox assets as the sort of remedy that AT&T and Time Warner should have been willing to agree to.

 

The best example is that just as Fox is having to spin Fox News off as a part of "New Fox", Turner would likely have to divest CNN and similar assets. So a possible Disney/Turner merger might require Turner to be split up, with assets that would grant Disney the Hulu stake and the Star Wars rights, while the rest would be the remainder of Turner. Though I believe that would mean Disney would be getting relatively less of what they're getting from Fox.

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https://www.cnbc.com/2018/11/19/disney-gets-approval-from-china-for-its-fox-acquisition-sending-shares-of-both-companies-up.html

 

China has unconditionally approved the Disney/Fox merger. Other countries still need to approve it, but this does cover one of the last major hurdles, so the merger is expected to close early in spring.

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https://www.reuters.com/article/us-at-t-outlook/att-commits-to-cutting-up-to-20-billion-in-debt-in-2019-idUSKCN1NY2Q1

https://qz.com/1480860/att-may-sell-its-stake-in-hulu-allowing-disney-to-buy-more-control/

 

Hulu is really the asset that ties a lot of these mergers together. AT&T is $180B in debt, and they're looking to pay off $20B of that debt next year by selling some non-essential assets. As I said, Disney would desperately want that Hulu stake, and it seems that AT&T would be all too happy to get rid of it.

 

Seems like the same situation Comcast is in, where they will likewise have to sell their Hulu stake to pay off some debt after the Sky deal. Disney has already worked to pay off some of their debt for Fox by selling the Sky stake to Comcast, so Disney should have more than enough capital to bail out AT&T and Comcast.

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https://www.bloomberg.com/news/articles/2018-12-05/in-at-t-merger-appeal-u-s-has-a-message-we-told-you-so

 

The appeal against the AT&T/Warner merger begins tomorrow. Fairly excited for this, especially since Richard Leon's argument was that he would need a crystal ball to predict what could happen. Now we know for a fact what happened, so it's time to punish AT&T for it.

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https://variety.com/2018/biz/features/variety-film-tv-music-predictions-2019-1203087313/

https://variety.com/2018/tv/news/sony-tamara-hunter-apple-1203087959/

https://www.vulture.com/2018/12/fast-franchise-director-justin-lin-leaves-sony-for-apple.html

 

There's a few weird stories here. First, Variety predicts that Apple will buy Sony. I've brought this up before, and while it is just a prediction, there seems to be some basis for this, with both Tamara Hunter and Justin Lin moving from Sony to Apple. It may just be a coincidence, but all of the pieces seem too convenient to believe it's just that. I could see Apple hiring some of these personnel so that Sony Pictures would be gradually eased into Apple.

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Same, the Supreme Court needs to rule on this. However, the DOJ really needs to step up their game on this. Richard Leon's ruling was that he could not predict how the merger would turn out. While I think the DOJ was correct in predicting AT&T's behavior, ultimately they were asking the judge to rule on how they think AT&T might act, not how they have actually acted. If it goes to the full appeals court or even the Supreme Court, the DOJ needs to make their case about what AT&T has done since the merger went through. Make the case about why the merger should be broken up now, not about the theories against why it shouldn't have happened in the first place.

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Disappointed, but not surprising. The merger has long since been properly integrated that I can't see the DOJ doing much to change anything anyway.

 

https://deadline.com/2019/02/hulu-stake-among-items-under-review-at-att-as-warnermedia-legal-clouds-part-1202566686/

 

The possibility of Disney acquiring AT&T's 10% stake in Hulu has come up before, and it seems that with this appeal over, AT&T can focus more on reducing its debt, and selling that stake would help to do just that.

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https://www.newyorker.com/magazine/2019/03/11/the-making-of-the-fox-news-white-house

 

This article largely focuses on how Fox News has operated as a propaganda machine for the current administration, but it does bring up that former chief economic advisor Gary Cohn was in fact ordered by Trump to oppose the AT&T/Time Warner merger. While the merger did need to be opposed, this continues to make the case that the DOJ was acting under Trump's bad faith, and for him to make this demand constitutes an impeachable offense.

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https://www.cnbc.com/2019/04/15/att-sells-hulu-stake-valuing-company-at-15-billion.html

https://www.latimes.com/business/hollywood/la-fi-ct-hulu-disney-comcast-20190425-story.html

 

This thread has lagged behind a bit, but let's stick with the regular companies of this thread. Hulu has repurchased AT&T's minority stake in the service, and Disney and Comcast are having talks about Comcast selling its own stake. I've been expecting for a while, but looks like we're indeed getting close to Disney fully acquiring Hulu.

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https://www.cnet.com/news/t-mobile-and-sprint-deal-wins-justice-department-ok-thanks-to-dish/

 

Sprint and T-Mobile's merger will be going forward, on the condition that Sprint sells some of its wireless spectrum and prepaid brands to Dish, to allow Dish to take Sprint's place as the fourth largest wireless carrier.

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