AT&T Fires Hundreds Of DC, HBO Execs In Latest Example Of 'Merger Synergies'

from the Do-not-pass-go,-do-not-collect-$200 dept

This may be shocking to hear, but nearly all of the promises AT&T made in the lead up to its $86 billion merger with Time Warner wound up not being true.

The company's promise that the deal wouldn't result in price hikes for consumers? False. The company's promise the deal wouldn't result in higher prices for competitors needing access to essential AT&T content like HBO? False. AT&T's promise they wouldn't hide Time Warner content behind exclusivity paywalls? False. The "$15 TV service" the company repeatedly hyped as a byproduct of the deal? Already discontinued. The idea that the merger would somehow create more jobs at the company? False.

AT&T has laid off 41,000 employees just since it received its 2017, $42 billion tax cut from the Trump administration for doing absolutely nothing (technically, less than nothing, since it fired countless employees and trimmed 2020 CAPEX by around $3 billion). And this week, the company laid off another 600 employees across Time Warner, including employees at HBO and DC Comics:

"The moves are likely to cause anxiety at WarnerMedia, which has reorganized several areas of its business since being acquired by AT&T for about $85 billion in 2018. Since AT&T took over the company formerly known as Time Warner, top executives with years of oversight of distribution, programming and advertising sales have departed. Kilar’s ascension to the CEO role in May has only served to fuel more recalibration."

Granted if you've watched the history of U.S. media and telecom consolidation, this should surprise nobody. The first year or two after such deals are usually filled with empty promises about how "nothing will change" (AT&T brass repeatedly promised Time Warner employees they would have ample resources and creative freedom), only to be followed up by everything changing, and, as is the case when a lumbering telecom monopoly jumps more fully into a creative business it doesn't fully understand, often not for the better.

And while AT&T has hinted that much of this had to do with COVID-19, that's not the case. Most of these moves were either planned for some time, or part of the company's ongoing attempts to shed the massive debt accumulated from the company's spending spree on DirecTV (2015) and Time Warner (2018). Both mergers were supposed to position AT&T as a dominant player in the online video and advertising space. Instead, AT&T has been losing paying TV customers hand over fist after a number of bungled decisions ranging from price hikes on price sensitive cord cutters to bungled streaming branding.

It was yet another example of the perils of a "growth for growth's sake" mindset, blended with yet another example of how lumbering, government-pampered telecom monopolies like AT&T and Verizon just aren't very good at this whole competition and innovation thing.

AT&T's repeated missteps were bad enough that they resulted in an investor backlash, the "retirement" of former AT&T CEO Randall Stephenson, and a newfound focus on firing more people than ever to recover debt. As is often the case, lower and mid-level management has to pay the cost for years of higher level managerial dysfunction. As is also often the case, the majority of press outlets that were eager to parrot AT&T's pre-merger promises are utterly absent when it comes time to tally the human cost of mindless merger mania.

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Filed Under: layoffs, mergers, promises
Companies: at&t, dc comics, hbo, time warner


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  • identicon
    Anonymous Coward, 13 Aug 2020 @ 6:22am

    Richard Bennett turned out to have lied again, news at fucking eleven!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 13 Aug 2020 @ 6:23am

    Shocking content. No ads for you.

    reply to this | link to this | view in chronology ]

  • identicon
    Pixelation, 13 Aug 2020 @ 6:42am

    The swamp is as full as ever

    In a US where our regulators and congresscritters weren't bought and paid for by AT&T, they would be required to pay the taxes they weaseled out of for doing shit like this. Instead, re-election coffers are brimming with cash and there is now an extra ~$3 billion to use for future payoffs.

    Well Mr Trump, no comment? Shocking.

    reply to this | link to this | view in chronology ]

    • identicon
      Baron von Robber, 13 Aug 2020 @ 6:43am

      Re: The swamp is as full as ever

      He's been busy swamping the drain.

      reply to this | link to this | view in chronology ]

      • icon
        Vidiot (profile), 13 Aug 2020 @ 7:10am

        Re: Re: The swamp is as full as ever

        I hear that drinking drain cleaner will cure that... I think it was the gypsy medical expert Dr. Feelgood who told him.

        reply to this | link to this | view in chronology ]

        • identicon
          mcinsand, 13 Aug 2020 @ 7:51am

          Re: Re: Re: The swamp is as full as ever

          >gypsy medical expert Dr. Feelgood who told him.

          Nah, he didn't even have to pick up the phone. This was just another one of the delusional voices inside his head.

          reply to this | link to this | view in chronology ]

        • identicon
          Baron von Robber, 13 Aug 2020 @ 8:33am

          Re: Re: Re: The swamp is as full as ever

          It's OK, Putin has the cure now. The Russian vaccine is 1/3 Lysol, 1/3 Clorox and 1/3 Novichok.

          reply to this | link to this | view in chronology ]

          • identicon
            Pixelation, 13 Aug 2020 @ 10:52am

            Re: Re: Re: Re: The swamp is as full as ever

            I heard from Trump that if you blow sunshine up someones ass, the UV light will kill Coronavirus!

            reply to this | link to this | view in chronology ]

  • icon
    Koby (profile), 13 Aug 2020 @ 6:52am

    Basic Economics

    Granted if you've watched the history of U.S. media and telecom consolidation, this should surprise nobody

    If you paid attention in economics, this should surprise nobody. This is the entire point behind mergers and consolidations. It removes competition, and allows for a single company to eliminate jobs with duplicate functions. Any judge who believed otherwise to approve the merger was a real dupe.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 13 Aug 2020 @ 7:37am

    This should result in the dissolution of the merger right?

    If there were any repercussions to failing to live up to the merger requirements like a real government would hold them too, then we would be seeing ATT being sold off to the highest bidder right now and all kinds of restrictions and requirements for anyone who purchased those pieces. The public is losing out due to the laughable terms and the lack of power to enforce them. If a company is too big to fail, it is too large to exist in the first place and should be hacked apart until it no longer risks a collapse of the economy when it inevitably fails.

    reply to this | link to this | view in chronology ]

    • icon
      nasch (profile), 16 Aug 2020 @ 7:09am

      Re: This should result in the dissolution of the merger right?

      The public is losing out due to the laughable terms

      What I don't understand is these terms where the company agrees not to do X or Y (raise prices, lay off employees, whatever it is) for 3 years or 5 or 7. Why is it a problem for them to do those things right away, but it's fine if they wait a while? Is it just because nobody involved actually cares about the issues and just want to wait for press coverage to go away?

      reply to this | link to this | view in chronology ]

  • icon
    Bloof (profile), 13 Aug 2020 @ 7:47am

    And so begins the hollowing out of the creative side of WB, firing the people who made the company worth anything, and the grand selloff of subsidiaries so the spreadsheet looks better now, with no thought as to how it'll look next year.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 13 Aug 2020 @ 7:56am

    HBO

    Obviously, the first thing one must do after purchasing a goose that lays golden eggs is to run a few experiments. Maybe it doesn't need to eat as much... or at all! Sure the gold's valuable, but you can make it more valuable if you don't have to spend any money on the goose's upkeep.

    I applaud the brilliant business genius of AT&T and their righteous crusade to stop HBO from being so wasteful.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 13 Aug 2020 @ 8:01am

    Thats the system in the usa mergers between corporations reduce competition,
    it results in higher prices for consumers.
    america needs at least 2-3 broadband providers in every state .and 3 mobile telecom companys to provide competition.
    theres no sign of this happening in a time when millions of people need fast broadband to work from home.
    Politicians and regulators need to rethink the whole system for regulating
    telecom and broadband providers for any hope of things getting better.
    att buying media corporations is a disaster since they have little experience of offering good consumer service or competing in the market place.
    Instead the rely on buying out possible competing companys or
    buying out regulators .

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 13 Aug 2020 @ 8:30am

    I wonder how much more the regular people can take before something snaps.

    reply to this | link to this | view in chronology ]

  • identicon
    Smartassicus the Roman, 13 Aug 2020 @ 10:00am

    Yeah, But,

    Who's the bigger fool, the fool, or the fool who follows him?

    I'd like to think that nobody is this stupid so it all boils down to this being the plan from the start, which is far more likely. I'm wondering how many politicians and politicians' friends got perks and cushy vacations out of back room deals to make this happen.

    "The first thing we do, let's kill all the lawyers".

    reply to this | link to this | view in chronology ]

  • icon
    ECA (profile), 13 Aug 2020 @ 11:24am

    why is this interesting.

    If I gave you enough money, I could make you do anything.. With enough money, would you be a willing slave?

    Its a thought, that it would have been great, if that money from the sale had to goto the Shareholders, even if to only buy back the shares. BEFORE it went into the top .1% of people AT the company.
    But considering They allow Different types of stock in a company, and those given to consumers give very little..

    Lets go back abit, and think about HOw they used to be affected, by major investment. That the wages on top would go down abit for a time to pay off the investment, but You would also get more Stockholders, to balance things out abit. By the time it was getting paid off, the wages on top would reflect that as well as increase, with the increase in profits.

    It was always fun reading papers and watching news as our gov, kept trying to track all the money, and get its share. But now there isnt much to share as they keep cutting the tax to nothing.

    Anyone understand the problem with to much money going around, and a state/fed that wishes to get a share? Look at detroit and the older Manufacturing locations. People were making good money and spending it. Taxes went up as the city Thought they needed more to do more, and ended up PAYING more for services that USED to be allot cheaper, and then the State wages went up(at the top) and then Detroit Died, and the taxes are now so high, who gets to pay? So the people left, it was to expensive. And Now the state has to figure out how to LOWER top wages..

    With all the games in economics, its amazing that there IS NO BALANCE..

    reply to this | link to this | view in chronology ]


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