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AT&T to Buy DirecTV for $48.5 Billion
- jmccree 12y agoThis is interesting. My building has tv/phone/internet via DirecPath, a fiber based isp now owned by DirecTV. The only alternative is via the local telco, AT&T. Will be interesting to see how this plays out.
- k-mcgrady 12y agoThere's no way this can pass, especially with the Comcast/Time Warner deal still in process. Maybe this will scare regulators into denying both deals.
- spacemanmatt 12y agoMaybe it will scare another 10 or 100k out of a lobbyist.
- dublinben 12y agoWhy not? AT&T has a fraction of the video subscribers that DirecTV has. They're not a major player at all. If you really want to avoid AT&T, then Dish still exists as a robust competitor.
- eastdakota 12y agoDoubt there will be any regulatory grumbling since it actually increases competition in the "triple play" space (Internet+Television+Phone). My hunch is that AT&T waited until they thought the Comcast + Time Warner deal was a virtual certainty before pulling the trigger on this. Who this will put more of a squeeze on is content providers (e.g., Disney/ESPN) as they now have to deal with two juggernauts.
- 6cxs2hd6 12y agoCall me cynical but I can imagine a golf-course deal where Comcast and AT&T agree to this. Theory being, AT&T+DirecTV will seem like a more-meaningful competitor for Comcast+TimeWarner.
- us0r 12y agoUnlikely considering Tom Wheeler was both companies Chief Lobbyist.
- shiift 12y agoNext up AT&T + Comcast merger... 'Cause why not?
- eastdakota 12y agoThat won't happen. Comcast + Verizon, perhaps.
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- mwally 12y agoBoth industries are doomed. I'll stay tuned to see how this turns out in like 5-10 years from now.
- npinguy 12y agoUse this as a perfect example to explain to people why Net Neutrality matters. "What incentive does AT&T have to bring you good streaming experience for Netflix, Hulu, or heck even Youtube when they'd much much MUCH rather you were buying DirecTV from them?"
- rm999 12y agoAT&T - and most major ISPs in the USA - already offer TV service. It's true that these consolidations will only give the big players more power, but the conflict of interest already exists.
- aroch 12y agoAnd ATT already provides horrible internet service and doesn't care! Defeatism!
- jusben1369 12y agoBecause I'll switch to Comcast or Verizon if I'm an ATT customer and their internet service is bad?
- AnthonyMouse 12y ago> Because I'll switch to Comcast or Verizon if I'm an ATT customer and their internet service is bad? Because Comcast is known for the high quality of their internet service? They all have the same incentive to degrade streaming services that compete with their TV packages. You're assuming that they won't each behave the same way even though doing so is to their collective benefit.
- DerpDerpDerp 12y agoI mean, I don't have an option to switch away from Comcast because their internet service is bad. That's why they can refuse to upgrade their peering with Netflix in the first place, because they know I'm stuck with them, when I'd dump pretty much any ISP who didn't upgrade their peering with a major website that I visit (in like 3-4 months) if I had the option to.
- edoceo 12y agoAccording to them lack of competition is good for the market. Maybe Zuckerburg can start a bandwidth company and bring another (desperately needed) player to the game.
- bdcravens 12y agoHow? Wireless? That'd be at least 3 years away, if he could piggy-back on another network. According to their Q4 report, AT&T spent about $50B EACH in expenses in 2013 on their wireless and wired operations. Zuck only has $25B (personally). How much of a network could he (or Facebook, after he gets shareholder approval) build? This isn't an app built in PHP or Objective C.
- sillysaurus3 12y agoDo many young people watch TV anymore? It seems like netflix + youtube scratches that itch.
- alaskamiller 12y agoYes. Except now the shows are timeshifted and streamed online.
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- jds375 12y agoI think it's really shifting away from TV. As a college student, my friends and I have been completely satisfied with Netflix and the like. I can confidently say that there is nearly a 0% chance I'll be getting cable/directv/whatever when I can just get Netflix/Hulu/etc instead.
- ams6110 12y agoDon't most ISPs make it economically infeasible to get internet services without also getting cable TV? Comcast here bundles servies such that internet only is more expensive than internet + cable.
- drewr 12y agoThis was the case for me historically as well, but I recently got an HD antenna to avoid paying the fee for digital and told them I didn't want the box. They somehow unbundled them and now I have a more expensive data plan for the same overall cost, and no TV listed anywhere on my bill. I have no idea if I'm practically any better off, but it's nice not feeling like I'm paying for something I'm not using.
- dkulchenko 12y agoYep, this is the case here as well. Paying Comcast for TV + internet because it's $15/month cheaper than internet alone. The cable box they sent me is sitting unpacked in the closet.
- icpmacdo 12y agoIs this acquisition from cash that AT&T hand or would they go to a bank and work with them for capital?
- cshenoy 12y ago$28.50 of the $95/share is cash while the rest is AT&T stock. From the PR release[0], "AT&T intends to finance the cash portion of the transaction through a combination of cash on hand, sale of non-core assets, committed financing facilities and opportunistic debt market transactions." [0]: http://about.att.com/story/att_to_acquire_directv.html http://about.att.com/story/att_to_acquire_directv.html
- ILIKEPONIES 12y agoIs it bad that I read this as 'AT&T to Buy DirecTV for 2.7 WhatsApps?'
- quotient 12y agoYes. This is not only a trivial, inconsequential point to raise, but your arithmetic is also off ($48.5/19 \approx 2.55$).
- ILIKEPONIES 12y agoYou sound like a fun person to hang out with. My arithmetic wasn't off. I misremembered the price by $1b.
- suprgeek 12y agoThe race is officially on! Can the Telecoms retain their terrible monopolies by becoming streaming providers Faster than the Streaming providers (Netflix, Youtube, Amazon Prime et al) trying to become Content creators? AT&T is running out of customers to squeeze in the cell phone plans market. This is the next frontier for terrible service, exorbitant prices and regulated monopolies...
- georgemcbay 12y agoThis race is rigged. Even if the streaming providers win the telecoms will just jack up the prices on their bandwidth when net neutrality is killed completely, which I don't think is an avoidable situation at this point.
- periferral 12y agoI disagree. If that happens, a new solution will emerge to replace the telecoms. To name a few, decentralized DNS, open wifi, google fiber etc.
- dsl 12y agoThe United States is too big (in terms of population density) for a replacement solution to gain traction outside major metros without massive government subsidies. It's cool to think as techies we could come up with some massive disruption technology, but short of a super blue sky type project, our best bet to leave a better internet to our children is to throw money into tech lobbying.
- dclowd9901 12y ago> The United States is too big (in terms of population density) for a replacement solution to gain traction outside major metros without massive government subsidies. Thankfully most people live in major metro areas.
- oblio 12y agoWell, history repeats itself. See the mobile phones for cellular networks (aka GSM). Made initially by Motorola, the technology spread all over the world and the US networks were actually lagging behind everyone else for quite a while.
- 001sky 12y agohttps://en.wikipedia.org/wiki/AT&T_Broadband https://en.wikipedia.org/wiki/AT&T_Broadband The cable/telco consolidation 1.0 play.
- raarts 12y agoThink. How would the content providers - any of them, from Disney to Facebook - get their content at the consumer without the data-distributors, from Comcast to AT&T ? The saying is internet kills the middleman, but this is the real middleman that needs to be killed, and just as our roads are free and open to everyone, so should the digital roads be.
- sukuriant 12y agoRoads aren't free, we pay for them in taxes and tolls.
- raarts 12y agoOF course they are not really 'free', but does Amazon pay toll to get things delivered to you? Do government bodies who maintain the roads, tax large suppliers to make use of them?
- dublinben 12y agoOnly in the sense that commercial trucks pay higher taxes. They pay that whether they're driving empty or full though, so the analogy falls apart.
- harryh 12y agoThe answer to your question is yes. The bulk of highway construction is funded via a gas tax. The more you use the roads the more you pay for them.
- jkelsey 12y agoWhen people say "free and open", that's context enough to know that they mean free as in freedom, not as in beer. Please stop using this silly red herring.
- sukuriant 12y agoI honestly didn't perceive it as "free as in freedom" in the above context. That said, roads aren't that, either. Try driving on one without a license, insurance, using them in ways that are disapproved of / disallowed (speeding heavily, drinking and driving, etc) to see. Alternatively, use the road to play a game of football. I don't really think they're "free as in freedom", either.
- kmfrk 12y agoPut that WhatsApp acquisition in your pipe and smoke it, Zuckerberg.
- mahyarm 12y agoA 30 engineer + 20 support staff company, I still bet they have a higher $/employee ratio.
- batuhanicoz 12y agoThis acquisition is actually pretty easy to make sense of, unlike WhatsApp acquisition of Facebook. This is a company which made USD 31.7 Billion in revenues last year[0]. [0]: http://www.sec.gov/Archives/edgar/data/1465112/000104746914001182/a2218415z10-k.htm http://www.sec.gov/Archives/edgar/data/1465112/0001047469140...
- marincounty 12y agoIf they can compete against the devil--Comcast; I'm all for this merger.
- wpietri 12y agoMarkets with a small number of large players tend to converge in terms of pricing and strategy, so we may end up with a cozy oligopoly rather than any serious competition.
- logicallee 12y agowow, I thought you meant "million"? You don't just buy a company for $48.5 billion, and have a tiny matter-of-fact headline like this. What's the last company that got bought for even $30 billion! This is a mind-boggling sum of money. Check out the largest mergers and acquisitions of all time: http://www.bloomberg.com/visual-data/best-and-worst/largest-mergers-and-acquisitions-of-all-time-deals http://www.bloomberg.com/visual-data/best-and-worst/largest-... (Do bear in mind inflation - add 45% since 1998 according to http://www.usinflationcalculator.com/ http://www.usinflationcalculator.com/) This deal must still be way up there. I wonder if someone can find the largest acquisitions of the past 2-3 years.
- trsohmers 12y agoThere have been a lot more, even recent ones... http://www.businessinsider.com/16-biggest-acquisitions-of-all-time-2014-2 http://www.businessinsider.com/16-biggest-acquisitions-of-al...
- logicallee 12y agoThanks. As you can see #16 as listed is in the ballpark and actually it says in your list's lead paragraph that #16, which is what prompted your list article, was for $45.2 billion. (So, less than this deal.) They get their ultimate figure by adding debt the acquirer takes on (as is typical). Including debt, our article actually says "Including the assumption of DirecTV’s debt, the deal is worth about $67.1 billion" so just a hair shy of #16 on your list if you include the debt. Either way, this is an absolutely mind-blowing deal in nominal terms. (As are all sixteen on your list.) This is a huge amount of money by any standard on Earth.
- blantonl 12y agoYou have to wonder how much the NFL Sunday Ticket was worth as part of this transaction.
- jonknee 12y agoNot very much considering it's up for renewal at the end of this year. There have been some fun rumors about who is in the bidding, including Google. http://www.bloomberg.com/news/2013-12-12/directv-said-near-renewal-of-deal-to-carry-nfl-sunday-ticket-.html http://www.bloomberg.com/news/2013-12-12/directv-said-near-r...
- capkutay 12y agoI'm surprised Apple didn't get into this recent movement of communications company acquisitions. For 1/3 of their cash pile, they could have streamlined control of not only the devices (tablets, phones, tv's) and the content market place (itunes), but also the infrastructure to provide media and telecom services through possible acquisitions of time warner, directv, and/or tmobile.
- mkal_tsr 12y agoThere are rumors of partnership with Comcast (which is looking to merge w/ Time Warner)
- Istof 12y agohopefully this will get blocked
- sliverstorm 12y agoIt's almost like the industry wants the government to step in on anti-trust grounds. Wait a minute...
- tn13 12y agoThis is getting dangerous. Imagine a world where a public transportation company owns the network of roads too and denies any other transportation company to come up besides their own.
- snsr 12y agoNot a perfect analogy, but this may be of interest to you - http://en.wikipedia.org/wiki/General_Motors_streetcar_conspiracy http://en.wikipedia.org/wiki/General_Motors_streetcar_conspi...
- glassdoor 12y agoNice try AT&T, Do you think FCC will allow it?
- ulfw 12y agoRidiculous that these things are allowed in the US. So for all your media needs there'll basically be only two providers some day - at&t or Comcast. Pathetic
- josephlord 12y agoThe graphs in the article are really good and clear, matched scale across the different graphs, enough years for context. I hadn't realised that US cable really was declining on such a scale rather than cable cutting being something more talked about than really happening.
- icantthinkofone 12y agoDinosaurs mating.
- parasubvert 12y agoNet Neutrality is a ruse: providers "promise" to maintain an SLA against their competitors when they still own the last mile, and the service, and the core network. In practice, SLAs are weak sauce. The more viable competitive model to me would be to a mandatory Open Access Network. http://www.opennetworkforum.org/what-is-an-open-network http://www.opennetworkforum.org/what-is-an-open-network 1. Spinoff of existing Big telcos own the core physical fibre or RF infrastructure 2. Various network providers own and operate active equipment & billing on the network - no one owns the last mile 3. Various service providers provide content & applications on the network. 4. No company performing one role can compete in another role, so as to avoid monopoly This of course will never happen in the USA because the inmates are running the asylum. So we'll have to rely on countries like Sweden to prove it out: https://www.acreo.se/sites/default/files/pub/acreo.se/EXPERTISE/broadband/forzati-mattsson_-_vitel_2013.pdf https://www.acreo.se/sites/default/files/pub/acreo.se/EXPERT...
- seoguru 12y agoS. Derek Turner's take: http://www.savetheinternet.com/blog/2014/05/19/why-the-att-directv-deal-dumbest-most-wasteful-deal-ever http://www.savetheinternet.com/blog/2014/05/19/why-the-att-d... "So for $67 billion, AT&T could pass 71 million new homes with gigabit fiber, and connect 21 million new subscribers (assuming an industry-average 30 percent take-rate)."