AT&T and Time Warner Seek to Mollify Deal’s Critics

On Oct 24, AT&T’s chief executive, Randall L. Stephenson, and his Time Warner counterpart, Jeffrey L. Bewkes, sought to address some of their biggest criticisms:

The Strategic Rationale: During the hourlong call, a form of the word “innovate” was used 32 times. The two chief executives believe combining their companies will help them innovate around advertising, the shows and movies people watch and where they watch them (hint: on their cellphones).

Regulatory Risk: Over the weekend, politicians from across the political spectrum came out against the deal. Both Democrats and Republicans argued that too much consolidation between telecommunications and media could only be bad for consumers. Bewkes argued that consumers would not feel the effect of this transaction, that the cost would be “borne by advertisers and consumers get a break.”

Affordability: Vertical integration may help the two companies on the regulatory front, but it does not get them far from a cost-savings standpoint. The companies pegged so-called synergies at $1 billion in annual run rate, within three years of the deal closing.