AT&T (nee SBC, nee Southwestern Bell) dropped a story Friday evening while some of the East Coast was disrupted by the DDOS attack that they had intentions to acquire Time Warner, the owner of CNN (the Cheap News Network), HBO, Warner Pictures, etc. for about $85 billion dollars.
Of course, this is subject to approval by the Federal Communications Commission, and similar to the NBCUniversal/Comcast acquisition from GE in 2010; expect concessions and terms of sale to also follow.
This deal however, does not include Time Warner Cable (historically branded for it’s Road Runner triple play services) which was spun off several years ago, but kept the name and the “sight and sound” logo.
Personally, I don’t feel it’s proper for another company of these sizes to merge; and Time Warner has a bad record with mergers (remember AOL’s acquisition of the year 2000?)
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Anyways I am tired of hearing “consumers” who lack telecom knowlege whine about rising cable costs. We as professionals, or followers to the industry know why our cable costs have gone up. It’s on rising costs of “subscriber fees” of cable networks and/or “retransmission” fees set by local stations/parent owners. The costs have gone through the roof over the last decade, and this is blamed to mostly the major US sports leagues taking away network rights’ of owning the production, and licensing them through “rights”. And because the leagues don’t want to be part of production, they’ll outsource back to the networks, and require them to pay ridiculous “rights” well into the tens of billions if you put NFL, NASCAR, MLB, NHL and IOC together. As a result, these networks make “profits” by jacking up advertising rates, moving premiere games onto cable (notice Fox with MLB and NASCAR on FS1 and crappier games like soccer on the broadcast network.) See they’ll say if you want to watch them so badly, then pay us directly via your cable bill and your cable plan.
Meanwhile networks are required under these agreements with the leagues to promote the sport in pre-game programming that is supposedly produced by the networks and have their own editorial freedoms. But not as of late. Another annoying problem is the constant in program promotions of other prime time shows, so the network can catch you to watch their programming so they can score high on ratings then charge it to the advertisers who then will have to pay back the leagues for the “rights” to carry.
In fact it’s so bad, where I live, my Fox station was owned by the network, but because my market is an AFC team, they went out to San Francisco and traded my market’s station and the new owners were the owners of the SF station.
But what was the net result?
Fox getting full ad dollars on 49ers games, and not get half like in the affiliate/franchise and here in Boston we suffer with crappier local news because Cox (the company that they swapped stations) changed the very vibrant news format to be more stale “like everyone else” mentality, i.e. to be more “professional” and “objective” (it’s really the style over substance. They have prejudices, etc.) Not only that they made their studio unwatchable, introduce crappy looking logos, etc. Locals out west didn’t like the change of news format, but I digress…
In short instead of blaming the cable providers for the rising costs, blame the networks and worse the sports leagues (in the order of worst offenders: NFL, NASCAR, MLB, NHL and the IOC.) They took control of the networks sports’ operations then had extended the cost to affiliates which then extended the cost to all 85% of TV viewers who watch them on cable or a non over the air fashion.
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