| | | | On Saturday night AT&T announced its plan to acquire Time Warner, the parent of CNN. Now the two companies are working on selling the $85 billion deal to regulators, Congress and consumers.
AT&T already reaches a wide swath of the country with wireless phone service and DirecTV. With the addition of Time Warner, "we can move much, much faster to bring our customers unique experiences in the world of mobility and the world of TV," AT&T CEO Randall Stephenson told me in a phone interview on Sunday afternoon.
Here's what Stephenson said about bundling: "I am absolutely convinced that, for a long period of time, there will be a large segment of our customers who want a premium bundle experience," with multiple big screen TVs and all the rest. But "there is another segment of our customer base that wants mobility-centric content. They want smaller bundles of premium content. They want to integrate it with social apps." This is what the forthcoming DirecTV Now service (a cable-like bundle of channels sold via the Internet) is all about. "So our challenge is to make sure our customers have choice." | | AT&T could do a lot of this without controlling Time Warner. DirecTV Now, after all, is about to launch in a few weeks. Stephenson acknowledged this but said "we can do it a whole lot faster" with channels like HBO and TNT in-house. As Time Warner CEO Jeff Bewkes can attest, the glacial pace of "TV Everywhere" adoption is an example of how long things can take in the media biz. In fact, Bewkes cited this example during the joint interview.
So Time Warner programming will be "an anchor tenant for these kinds of experiences," Stephenson said. He predicted that "it's going to cause other content creators to join in… It's going to spur a whole cycle of innovation…" | | | What's the deal all about? | | | Clinton has "a number of questions and concerns" | | David Goldman writes: No matter who our next president will be, regulators are likely going to be very tough on the $85 billion mega-merger. The regulatory climate has intensified lately, with the Obama administration saying no to several huge deals...
We already heard Trump's opposition on Saturday. He reiterated it on Sunday. And the Clinton campaign also weighed in. Clinton campaign press secretary Brian Fallon said at a gaggle: "We think that marketplace competition is a good and healthy thing for consumers. And so there are a number of questions and concerns that rise in that vein about this announced deal, but there is still a lot of information that needs to come out before any conclusion should be reached. Certainly she thinks that regulators should scrutinize it closely." Read David's full story...
-- My take: This once again underlines a difference between Trump and Clinton: He hurries to a conclusion (block the deal) while she responds more normally and cautiously (express concern, defer to regulators)... | | | Senate hearing next month... | | -- FYI: The chair and ranking member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights say they will hold hearings on the proposed deal next month...
-- No surprise here: Bernie Sanders came out Sunday and said "the administration should kill the Time Warner/AT&T merger. This deal would mean higher prices and fewer choices for the American people..."
-- Reminder: AT&T execs expect the regulatory review to take 12+ months... | | | What you're going to hear Monday: "Pro-consumer" | | | Bewkes and Stephenson will be on CNN and CNBC Monday morning... | | | CNN's journalistic independence | | AT&T has never owned a news division before. Now it's lining up to take control of CNN. This raises some obvious questions. Does AT&T know what it's buying? How will the company approach its role as a steward of news?
Turns out that AT&T CEO Randall Stephenson has already given this some thought.
"Ensuring the public that CNN remains independent from an editorial perspective is critical," Stephenson said in an email shared with a group of top journalists and media CEOs on Sunday. Stephenson's email described CNN as "an American symbol of independent journalism and First Amendment free speech."
In our phone interview Sunday afternoon, he elaborated: "We are fully appreciative and cognizant of that kind of independence." Key quote: "I think you can begin to destroy a brand like CNN if you begin to meddle in its independence..." So "we're going to be very cautious..."
As I said on "Reliable Sources" today, actions speak a lot louder than words, but these words are a very good start.
Here's my full story, featuring former CNN CEO Tom Johnson, and more quotes from Stephenson... | | | ICYMI: What this deal means for CNNers | | This is from last night's newsletter, in case some of my CNN colleagues missed it...
In the short term, nothing really changes at CNN. M&A sometimes slows things inside companies, but hopefully that won't happen here.
AT&T does not intend to spin off CNN as a separate company; it views CNN as a "crown jewel" and wants the news division to continue putting up big annual profits. That's one of the reasons why I don't expect much meddling: What CNN is doing now is working. If anything, this deal will accelerate CNN's move into online video, which has already been a priority...
-- Also worth noting: AT&T doesn't have a news division, so there's not a lot of overlap with staffers in NYC, ATL, DC, and elsewhere. So this is not a merger that triggers lots of layoffs. AT&T is saddled with lots of debt, however, so there could be more pressure to trim costs... | | | Reuters' Liana Baker writes: When Bewkes welcomed Stephenson "for lunch at Time Warner Center in New York in late August, their meeting was supposed to be one of the catch-ups the two chief executives have had over the years. And it certainly started that way, with the two men chatting about the direction of the media... Stephenson and Bewkes discussed how Time Warner could reach more customers through AT&T's mobile network, and how that content could reinforce the loyalty of customers. Some of this could be achieved through closer ties and partnerships. But then Stephenson showed his hand. He proposed an outright merger of the two companies..." | | | The history of Time Warner | | "The history of Time Warner has been a story of consolidation, de-consolidation and re-consolidation that largely maps and explains broader changes in the industry," Dylan Byers writes. Read his full story here...
-- Bewkes is retiring... But not until after the deal closes and he helps with the transition for a "reasonable period of time..."
-- WSJ's Monday headline: "Low-Key CEO Jeff Bewkes Reshaped Time Warner Before AT&T Sale"
-- Sorry, boss: On Saturday night Bewkes called while Cristina Alesci, Poppy Harlow and I were getting ready for a live segment about the deal on "CNN Newsroom." He was still answering our first question -- asserting the deal is "pro-consumer" -- when the commercial break suddenly ended and I had to hang up on him. Live TV! | | | What the people upstairs are thinking | | At Time Warner's NYC corporate offices and on the Warner Bros lot, "most employees are cautiously optimistic that the sale to the telecom giant is the best possible outcome," Variety's Brent Lang and Cynthia Littleton write... "There are fewer redundancies, and likely fewer job cuts, than if Time Warner had been purchased by 21st Century Fox or even Google, insiders reason..." | | Growth and power. AT&T thinks it needs to diversify; wants to own programming; and wants to keep Time Warner out of the hands of its huge rivals. Here's my full story...
-- Related: Our look at the long history of AT&T... | | | Brian Lowry emails: If this triggers a media merger wave, I wouldn't be surprised if a major defense echoes the one used when the studios and networks combined in the mid-1990s after elimination of the financial interest and syndication rule -- namely, that if we don't allow U.S. companies to merge, international ones will buy them. There's already concern about China's Hollywood ambitions in general, and Dalian Wanda in particular. It's unclear how well that argument will resonate now. But it was certainly effective then... | | | Important notes and quotes | | -- Quote of the weekend via AT&T: "The future of mobile is video and the future of video is mobile."
-- Kara Swisher asked Steve Case for his view of the deal. He said "I just hope the merged company will have the kind of culture that will enable it to drive synergies and create value..."
-- Will Peter Chernin play a key role? On Saturday night Stephenson said "I don't have any idea what Peter's plans are... I speak to him a lot... I think Peter's got his hands full right now..."
-- A good read in Monday's NYT by David Gelles: "The Corporate Confidence of the AT&T-Time Warner Deal" | | | In other news this weekend... | | | Check out our focus group | | | Curt Schilling joining Breitbart | | NYMag's Gabriel Sherman reports: "On Monday, Breitbart plans to announce that former Red Sox pitcher and Trump supporter Curt Schilling will begin hosting a daily online radio show featuring political commentary and calls from listeners. The broadcast will eventually include a video livestream." ESPN fired him six months ago...
-- Politico's Dan Diamond tweets: "Friday: Asks on live TV why Jews vote for Democrats. Sunday: Joining Breitbart." | | | Review Journal endorses Trump | | | NYT's Maggie Haberman: Over the weekend the Las Vegas Review-Journal became "the first major newspaper to give Mr. Trump its blessing, though it may come with something of an asterisk: The Review-Journal was bought late last year by the casino magnate and billionaire Sheldon Adelson, a Trump supporter and longtime Republican benefactor..." | | | Misleading people about polls, example #194 | | | On Sunday Drudge told his readers that Trump is actually winning, despite almost all other evidence to the contrary. He was linking to the IBD/TIPP tracking poll... | | As David Catanese tweeted: "IBD/TIPP & LATimes/USC out on a lonesome limb in their polling. Gotta respect their experimentation though. Either will be fools or savants."
Sites like Drudge, of course, aren't pointing out that these polls are outliers. On "Reliable Sources," ABC's Matthew Dowd very clearly explained why this is a problem:
"Yes, it's not over, but it's a definite Hillary advantage and she's most likely going to win it. There are a # of voters out there, if you tell them that it's 'too close to call,' and all of a sudden they show up on Election Day and it's a six- or seven- or an eight-point race, they actually are going to trust the system LESS... When Trump points to one or two polls that are outlier polls saying it's 'too close to call,' or his campaign management tries to convince his voters that he's really competitive in the course of this race, it actually feeds the narrative that on election night, if he loses, then they believe the system is rigged..." | | | Alec Baldwin's quip during the "SNL" cold open: "On November 9, make sure you check out Trump TV. You're gonna hate it." | | | Watch/hear "Reliable Sources" | | | And don't forget the 3am replay! | | | "Reliable Sources" will re-air Monday at 3am ET on CNN... | | -- Sean Spicer: The media playing field is "tilted" in favor of Clinton...
-- Jane Hall: In Gettysburg, Trump "wasn't off message. That IS his message..."
-- Dan Rather: "This election is not over... It's still possible he could win, and all this talk about sweep for Hillary Clinton and a so-called mandate is way premature. I'm reminded of the old saying in Texas and Louisiana, 'Don't taunt the alligator until after you cross the creek.' I think the Clinton people may be making that mistake..."
-- MZ Hemingway: "It's not bad to scrutinize Donald Trump, he's gotten that. That's great. We have also a historically problematic candidate for the Democratic Party, and she's just getting a pass left and right..."
-- Dr. Gail Saltz: During this election "people are arguing with people in their circle, with people at work and arguing via social media. It feels like we're having a minute-to-minute fight. And that raises people's anxiety levels tremendously..." | | | Tom Hanks as Chris Wallace | | | I thought this was one of the highlights of "SNL" -- watching Tom Hanks nail this Chris Wallace impression... | | | "Why would the media rig it against HIM?" | | | I've been waiting for someone to say this. Colin Jost during "Weekend Update," taking apart Trump's "rigged election" claims: "Why would the media rig it against HIM? He's the greatest thing that ever happened to them. Who do you think they'd rather spend the next 4 years covering? A grandma that loves secrets, or a human air horn who screams every thought in his head and can't swing his arms without grabbing a lady's ass..." | | | If you haven't watched "Black Jeopardy" yet... | | | "The Simpsons" spoofs BuzzFeed | | | Sandra Gonzalez has an exclusive first look at Sunday's episode of "The Simpsons," which features a spoof of BuzzFeed, errr, BizzFad. The episode's title: "Trust But Clarify." It's hilarious... Check it out here... | | | What do you like about this newsletter? What do you dislike? Send your feedback to reliablesources@cnn.com. We appreciate every email... And we'll be back tomorrow with more... | | | Get Reliable Sources, a comprehensive summary of the most important media news, delivered to your inbox every afternoon. | | | | | |
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