In this age of rising focus on traditional TV news media -- especially with strong ratings and advertising revenues among the three big cable TV networks -- why would AT&T sell CNN?
Reports suggest AT&T -- in its potential deal with Time Warner -- is looking to sell CNN and entertainment/gossip news brand TMZ. But John Stankey, the new CEO at the AT&T Entertainment Group, says this is not going to happen. CNN isn’t for sale. (TMZ might be another matter.)
Conspiracy theorists might look to the campaign finances AT&T contributed to Republican interests and the Trump presidential campaign. Deadline Hollywood notes, according to The Hill, that AT&T was one of the largest donors to Trump’s inaugural committee, giving $2 million in cash contributions and $82,483 in-kind donations for mobile equipment/software.
But remember, capitalism is a fluid thing. Big corporations have often contributed to both major political parties.
The Center for Responsive Politics said that of the total $11.6 million AT&T gave to political campaigns in 2016, $3.8 million went to Democrats, while $7.6 million went to Republican candidates. That’s a 65% share for Republicans/33% Democrats. But the biggest single direct recipient of AT&T’s money, when it came to the presidential election, was Hillary Clinton at $339,260.
Also consider the financial state of AT&T -- looking to take on even more debt with the Time Warner purchase, just two years after completing its big $49 billion DirecTV acquisition in July 2015. AT&T needs to do what any big company does after a big acquisition push -- pay down some of its debt.
CNN took in $1.3 billion in total revenue, according to Pew Research and SNL Kagan estimates.
Several years ago, one analyst estimated CNN’s value to be more than $10 billion. Now it may be $12 billion or $13 billion. How much is AT&T paying for Time Warner? $83 billion. Seems like a drop in the bucket to pay for the big deal. But it’s a start.
AT&T was in the pay TV business in 1999, buying the cable systems of Tele-Communications Inc. (TCI) for $48.5 billion — with none other than John Malone at the helm. It sold those operations to Comcast in 2002 for $52 billion.
Now with DirecTV, it is back in the game. But with Time Warner, it’s a different thing: AT&T hasn’t had any experience in straight-ahead TV entertainment programming and production.
More acquisitions and/or spinoffs to come? Maybe a little of both.