Time Warner Inc.NYSE
Today, 1:05 PM
Yesterday, 7:04 PM
- Those staring into tea leaves for a read on the likely approval of AT&T's (T -0.8%) deal for Time Warner (TWX +1.7%) would do well to heed the take of presidential candidate Hillary Clinton, who says the transaction calls for study.
- "I think it raises questions and concerns, and they should be looked into," Clinton said on her campaign plane about the blockbuster deal. "If I'm fortunate enough to be president, I will expect the government to conduct a very thorough analysis before making a decision."
- Meanwhile, according to what (currently anonymous) media execs are telling Reuters, media companies will press regulators to make AT&T/Time Warner divulge a mountain of customer data to blunt any potential unfair advantage in targeted ad sales.
- The combination would give the two possibly unprecedented viewing data about its customers. But there's no precedent for data access issues in an antitrust review, so rivals are pressing a tough case.
- AT&T chief Randall Stephenson had acknowledged not only that data was a deal driver but that other providers might get access -- "To the extent that it keeps their content costs down, we'd be open to it," he said -- which suggests a happy medium could be reached for some price.
- Previously: Report: AT&T making millions off trading sensitive user info to law (Oct. 26 2016)
- Previous AT&T/Time Warner coverage
Yesterday, 12:05 AM
- Yahoo's been in crosshairs over a purported program made at the behest of government intelligence to spy on its users -- and now AT&T (NYSE:T) is being linked to creating a program to sell vital user information to law enforcement agencies for millions (of taxpayer dollars), according to a report in The Daily Beast.
- As with Yahoo, the AT&T report comes on the heels of critical M&A activity, as the telecom giant works to engulf Time Warner (NYSE:TWX) and become a media powerhouse.
- The telecom created a program called "Project Hemisphere" that warrantlessly bundles information on users, including their locations, and sells them to various agencies, the report says: “No warrant is required to make use of the company’s massive trove of data, according to AT&T documents, only a promise from law enforcement to not disclose Hemisphere if an investigation using it becomes public."
- The Daily Beast reported from AT&T's own documentation on the program, the article says.
- The nine-year-old program is used in 28 Drug Enforcement Agency centers, the report says, though law enforcement is insulated from the data, which is accessed by AT&T employees.
Tue, Oct. 25, 7:38 PM
- On a week where AMC's (AMCX +4.1%) The Walking Dead returned to action and nearly bested NFL football, CBS (CBS -0.6%) did what it does, and led prime-time ratings again.
- The network came in first for the week with an average of 9.9M viewers, ahead of NBC (CMCSA -0.7%) with 7.7M. ABC (DIS -0.7%) averaged 5.4M viewers and Fox (FOX, FOXA) 3.1M. NBC led the coveted 18-49 demographic.
- In cable, Fox News was the leader again, with 3.21M viewers, ahead of AMC's zombie-boosted 2.172M and CNN's (TWX +0.5%) 2.169M. ESPN fell in fourth place with 2.14M viewers, ahead of MSNBC's 1.78M.
- Among individual programs, The Walking Dead's 17M was only topped by NBC's broadcast of the Seattle Seahawks-Arizona Cardinals game (17.7M). Rounding out the next five programs, it was all CBS: 60 Minutes, with 15.99M; NCIS, with 14.77M; Chicago at Green Bay football, 14.2M; The Big Bang Theory, 14.2M; Bull, 12.3M.
Tue, Oct. 25, 4:01 AM
- Netflix (NASDAQ:NFLX) CEO Reed Hastings is in favor of AT&T's (NYSE:T) planned $85.4B acquisition of Time Warner (NYSE:TWX), provided that HBO doesn't receive "an unfair advantage" and his media company continued to be treated fairly.
- "The key thing is net neutrality, which has not been AT&T's favorite topic," he declared at last night's WSJ.D Live conference.
- Looking to the next 10 to 15 years, Hastings said Netflix would continue to focus on movies and TV shows, and "no sports, no news."
Mon, Oct. 24, 7:24 PM
- Scary Tyler Perry outlasted Ouija-board horror at the box office as Halloween nears, as Boo! A Madea Halloween (NYSE:LGF) topped the chart with $28.5M in grosses.
- That was better than Tom Cruise in Jack Reacher: Never Go Back (VIA, VIAB) which drew a still solid $22.9M despite appearing in 67% more theaters than the Perry film.
- Jack Reacher did better in foreign markets, adding $31M outside the U.S., while Perry's film only logged domestic grosses.
- Meanwhile, a third debut, Ouija: Origin of Evil (NASDAQ:CMCSA), held down the No. 3 spot with $14.1M, just ahead of last week's leader, The Accountant (NYSE:TWX) with $13.6M.
- The weekend overall was the biggest at the box office in a few months.
- In milestones: Sully (TWX) crossed $120M in its seventh week, adding $1.49M.
Mon, Oct. 24, 6:59 PM
- After some long prep, Nielsen (NLSN +0.6%) is finally ready to measure out-of-home viewing, tapping some previously invisible ratings from viewership in public places, including restaurants, bars, airports and waiting rooms.
- The company will use its Portable People Meter to measure viewing from panelists wherever they go, and combine that with its National TV ratings panel for in-home viewing. It's a stand-along service for the moment, with plans to integrated it directly into national TV ratings in the future.
- Nielsen will offer both program and commercial ratings for live through Live+7 days. Based on more than 75,000 Portable People Meter panelists, the company will be able to project out-of-home viewing for more than half the U.S. population.
- The service should launch in April with data back to January, while data back to September 2016 should be added shortly after launch.
- News like this could be a boon for key providers of major-event sports broadcasting, which often gets significant viewership at bars and restaurants: ESPN (NYSE:DIS), Fox (FOX, FOXA), and Turner (NYSE:TWX) among others like CBS (NYSE:CBS) and NBC (NASDAQ:CMCSA).
Mon, Oct. 24, 6:45 PM
- Along with Moody's decision to put AT&T's (T -1.7%) credit ratings on review for possible downgrade, S&P Global Ratings and Fitch have come in with their own reviews of credit effects from the megadeal to acquire Time Warner (TWX -3.1%).
- S&P has put its AT&T ratings -- including a BBB+ corporate credit rating and BBB+ senior unsecured debt rating -- on T)+on+CreditWatch+Negative+Following+Move+to+Acquire+Time+Warner/12159691.html" target="_blank">CreditWatch with negative implications. Like Moody's, it expects any potential downgrade could be limited to one notch (keeping AT&T in investment grade status).
- The firm says the deal has "some strategic merits" and it will resolve its review once it's assessed the impact, including a "commitment to debt reduction, our view of the combined business, and its ability to grow EBITDA and improve FOCF generation."
- Fitch put its ratings for AT&T (A- long term) on Rating Watch Negative. The deal gives AT&T a "strong foothold" in media but "as proposed, is likely to lead to a one-notch downgrade." Fitch affirmed Time Warner's BBB+ rating.
- After hours: T +0.1%; TWX +0.1%.
Mon, Oct. 24, 4:43 PM
- U.S. regulators will make their own decisions about whether they'll give a formal review to AT&T's (T -1.7%) deal to acquire Time Warner (TWX -3.1%), the White House says.
- Speaking to reporters aboard Air Force One, administration spokesman Josh Earnest says that deciding to review the deal will be up to personnel at the Justice Dept. and the Federal Trade Commission.
- "Certainly when you consider the size of the deal ... I don't think anybody would be surprised if they announced a review," Earnest says. "The president would hope and expect that regulators would carefully consider the potential impact of this deal on consumers."
- Previous AT&T/Time Warner coverage
Mon, Oct. 24, 9:40 AM
- "The convergence in ... media and distribution is fast," says AT&T (T -1.9%) chief Randall Stephenson on a call (still ongoing) addressing the company's $85B deal for Time Warner (TWX -2.8%). "We want to be at the front of it; we don't want to be chasing it."
- The blockbuster deal gets the telecom giant some of today's best-known media brands via Warner Bros., Turner Broadcasting and HBO, but Stephenson singled out three keys: Superman, Game of Thrones and CNN.
- "When Jeff [Bewkes, Time Warner CEO] and I met and both gained conviction about the art of the possible," Stephenson says, "you don't sit around and wait on perfect timing" for deals like this. Given the potential for leaks, "you go ahead and get them done."
- Execs on the call were firm about the deal's chances with regulators. All the deals that have been in trouble over the past few years were horizontal, Stephenson says, with a competitor being taken out of the marketplace: "Jeff's company is a supplier to AT&T."
- The company line is that the legacy separation between content and distribution is getting in consumers' way, and the deal will provide downward pressure on consumer prices and upward pressure on choice. But TWX is trading at a deep discount to the deal so far this morning, likely on regulatory worries.
- Bewkes set straight notions that he'd be leaving the organization ("I'll be staying" for years) and Time Warner will be a wholly owned subsidiary of AT&T and will stay largely the same, says Stephenson. "I've never run a movie studio before," he adds.
- AT&T CFO John Stephens says the cash portion of the half-stock deal is fully funded, with a $40B bridge loan combined with AT&T liquidity. The company likes the debt outlook despite the size of the deal: a net debt/EBITDA of "2.5 range" by end of the first year, approaching the range of 1.8 by the end of year four, and a $1B run-rate synergy by the end of year three. Free cash flow is expected to be accretive in year one, as with EPS.
Mon, Oct. 24, 5:38 AM
- Next up for the blockbuster $85.4B deal for AT&T (NYSE:T) to buy Time Warner (NYSE:TWX) is navigating the political landscape given what are certain to be objections by lawmakers and media/telecom rivals.
- Before the deal was even officially announced, Donald Trump was on the tape saying he would block it, while Clinton running mate Tim Kaine voiced his concerns a few hours later.
- Comcast's purchase of NBC Universal made it through in 2011, but not until after 13 months of review, and some have complained that conditions of the approval - such as its requirement to not weigh in on big decisions at Hulu - were tough to monitor and enforce.
- No stranger to making its way around D.C., AT&T is no doubt stealing itself for what lay ahead, but CEO Randall Stephenson on a Saturday night conference call played down regulatory concerns, arguing this deal isn't increasing industry concentration as it combines a content provider with a content distributor.
Sun, Oct. 23, 10:10 AM
- "Premium content always wins," says AT&T (NYSE:T) CEO Randall Stephenson, who will head the combined company. "It has been true on the big screen, the TV screen and now it’s proving true on the mobile screen." Should the deal go through, the owner of DirecTV would add networks like HBO, TNT, and CNN, along with Warner Bros. film and TV studio to its stable.
- Time Warner (NYSE:TWX) CEO Jeff Bewkes will stay on for an interim period of time to help with the transition.
- The deal is expected to be accretive in year one to T's adjusted EPS and free cash flow, and improve the dividend coverage. The company sees $1B in annual run rate cost synergies within three years of closing.
- Terms: Time Warner owners will receive $107.50 per share comprised of $53.75 of cash and $53.75 in AT&T stock. A collar is involved, meaning TWX shareholders get 1.437 shares of AT&T should its average stock price be below $37.411 at closing, and 1.3 shares of AT&T should it be above $41.349 (Friday's close for T was $37.49, and for TWX $89.48).
- The cash portion of the deal will be funded with cash and new debt. By the end of year one after closing, AT&T expects net debt to adjusted EBITDA to be in the 2.5x range.
- Speaking on a conference call last night, Stephenson played down any regulatory concerns with the argument that AT&T isn't eliminating a competitor, but rather is buying a supplier - the sort of merger typically not blocked by D.C.
- Alongside the merger announcement, AT&T also reported its Q3, with adjusted EPS of $0.74 missing estimates by a penny. The earnings call is set for Monday at 8:30 ET.
Sat, Oct. 22, 2:39 PM
- According to various media reports, AT&T (NYSE:T) has its deal to buy Time Warner (NYSE:TWX) for more than $80B, the biggest media takeover in years.
- That will come between $105 and $110 a share for Time Warner, and could be announced officially tonight.
- Attention now turns to regulatory questions. Is the deal essentially the same as Comcast's 2011 deal to acquire NBCUniversal?
- A small station ownership issue means the FCC will have a say as well.
Fri, Oct. 21, 6:19 PM
- AT&T (NYSE:T) has a deal in principle to buy Time Warner (NYSE:TWX) for $85B, a 16%-plus premium above today's closing market cap, Reuters is reporting.
- That blockbuster could come with full details as soon as Sunday, as Reuters was reporting earlier.
- Following on AT&T's $48B acquisition of DirecTV last year, adding Time Warner would make AT&T a central media player, with control not only of its wide distribution network in satellite and wireless but some of media's most coveted assets: the Warner Bros. film studio, live sports-friendly Turner Broadcasting networks, CNN, and most especially HBO.
- Now after hours: TWX +4.3% to $93.32/share; T -0.8%.
Fri, Oct. 21, 6:03 PM
- No sooner did an AT&T/Time Warner merger seem as close as Monday than Reuters reports the two companies have reached agreement on most terms, with hopes to announce the deal as soon as Sunday.
- Time Warner's (TWX +7.8%) on the move yet again, up 3.9% after hours. AT&T (T -3%) is down 0.6% in postmarket trading.
- Time Warner's after-hours quote puts it at $93.00. Meanwhile, as analysts started to weigh in more today, sources put the deal at "well north" of $90/share (CNBC), and the price could go to $110/share -- a 23% premium above today's close.
- Brean analyst Alan Gould said in a note that the deal could hit the $110-$125 range per share.
- Fox failed in its 2014 pursuit of Time Warner at $85/share.
Fri, Oct. 21, 5:23 PM
- AT&T's (T -3%) interest in Time Warner (TWX +7.8%) progressed quickly from "had talks" to "advanced talks" and now a deal could be set by Monday -- which Bloomberg says is due to a sped-up timetable caused by Bloomberg's initial report.
- That's because AT&T is said to be concerned that the publicity could allow other interested suitors like Apple (AAPL -0.4%) or Alphabet (GOOG +0.3%, GOOGL +0.3%) to jump in -- and indeed Apple is said to be monitoring the deal talks, after it made its own approach to Time Warner a few months ago, The Wall Street Journal reports.
- Those talks involved execs under Apple chief Tim Cook and didn't get beyond a preliminary stage. A source tells the WSJ that Google doesn't look interested in an offer for Time Warner.
- But the story of the deal points out just how much behind-the-scenes strategic talk is going on in the media/telecom spaces, as companies vie to be among the new leaders in an upended, converged digital media climate.
- Sumner Redstone was said to be considering not only the merger of CBS (CBS +2.1%) and Viacom (VIA +2.7%, VIAB +2.8%) that he's already pushing for, but also to combine that entity with Time Warner.
- Meanwhile, Comcast (CMCSA -0.5%) could join another company to get involved, the WSJ says, though that makes more sense if Time Warner's open to being parted out.
- Unlikely to join in this time: Twenty-First Century Fox (FOX +2.2%, FOXA +2.2%), whose own pursuit of Time Warner failed in 2014 at $85/share, and Walt Disney (DIS +1.1%).
- Previously: Time Warner at 15-year highs on merger talk; media companies rise (Oct. 21 2016)