from the merge-ALL-the-things! dept
AT&T spent $200 billion to acquire Time Warner and DirecTV, believing this would turn the dodgy old phone company into an innovative new media juggernaut. But despite $42 billion in tax breaks and oodles of regulatory favors from the Trump administration (like killing net neutrality), AT&T simply couldn’t overcome its own nature as a bumbling, government-pampered telecom monopoly.
As a result, the company has laid off more than 52,848 employees, lost more than 8 million TV subscribers, and made numerous enemies by shitcanning numerous top executives, gutting numerous brands that were popular with consumers (Mad Magazine comes quickly to mind), and behaving like a cocky bully in a high school cafeteria despite having clearly no idea what it was actually doing.
AT&T was ultimately forced to sell Time Warner to Discovery, which somehow made things even worse. Now, after socking customers with two sets of price hikes this year alone, AT&T is purportedly considering exiting its 70 percent ownership stake in DirecTV as well. Apparently, and who would have guessed it, but there’s not much of a future in traditional satellite TV service:
“AT&T’s purported exploration of its DirecTV stake comes about as DirecTV and other pay-TV providers continue to shed subscribers. Leichtman Research Group (LRG) estimates that privately held DirecTV lost about 400,000 subscribers in Q2 2023, ending the quarter with 12.35 million.”
Great job everyone, terribly impressive. What was supposed to be a masterful gambit to position AT&T as a media colossus, instead resulted in an absolute swath of incompetence and dysfunction where hundreds of billions of dollars were all but set on fire. All while AT&T broadband customers in countless states remain stuck on aging DSL lines instead of fiber because the company has historically been too cheap to fully upgrade its networks (despite taxpayer subsidies).
There will, of course, be zero introspection from anybody in this chain — at AT&T or U.S. regulators — in terms of whether any of these deals should have proceeded in the first place. The entire saga will be memory holed so we can repeat the exact same process with some new media or telecom juggernaut a few years from now, having learned absolutely nothing from the experience.
There’s simply no financial incentive for anyone involved to think too deeply about any of it. Executives got their short term tax breaks, outsized compensation, and fail upwards participation trophies, while regulators got rewarded with shiny new revolving door opportunities. All while employees lost their jobs and consumers got stuck with price hikes and ever-shittier streaming services. Quite the innovation.