AT&T is buying satellite TV company DirecTV in a $48.5 billion deal. Like so many other media mergers, the news has executives and Wall Street analysts tossing around corporate buzzwords. There’s the old favorite “synergy,” of course. But “bundle” is the key word for this proposed combination.
“They can bundle this with a broadband product and offer a bundle of voice, video and broadband, which they haven’t been able to do in a lot of their footprint up until now,” says Jonathan Chaplin at New Street Research.
Grabbing America’s biggest satellite provider allows AT&T to expand its move to sell more services on one bill nationwide.
If the deal goes through, AT&T would be the second largest American pay TV operator. Its 26 million customers would be just behind a combined Comcast-Time Warner Cable, which would have 30 million if its own proposed merger goes through.
AT&T is already offering significant concessions, enough that Wall Street expects regulators will let its deal go through.
Mark Garrison: Media mergers tend to be heavy on corporate buzzwords. Synergy is an old favorite. Bundle is popular these days and Jonathan Chaplin at New Street Research says this deal is bundle-icious.
Jonathan Chaplin: They can bundle this with a broadband product and offer a bundle of voice, video and broadband, which they haven’t been able to do in a lot of their footprint up until now.
AT&T wants to sell you everything on one bill. Grabbing America’s biggest satellite provider lets them do that nationwide. If all goes through, AT&T will be the second largest pay TV operator. That means regulators will take a close look. Chaplin and other analysts believe AT&T’s offer to make concessions will be enough.
Chaplin: This is a deal that’s gonna get through.
DirecTV’s Latin American business is also a factor, says Macquarie senior analyst Amy Yong.
Amy Yong: That is a clear growth opportunity for AT&T over the next few years.
The companies expect the deal to close within a year. In New York, I'm Mark Garrison, for Marketplace.
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