Why Some on Wall Street Want AT&T and Comcast to Spin Off Media Units

[Y2kTheNewOldies]

Why Some on Wall Street Want AT&T and Comcast to Spin Off Media Units

Comcast and AT&T are betting on the benefits of owning content and distribution businesses, but some on Wall Street prefer "pure-play" companies.

www.hollywoodreporter.com

A Casablanca quote crossed WarnerMedia CEO Jason Kilar’s lips during AT&T’s March 12 investor day when touting the benefits of vertical integration, or housing content and distribution businesses under the same corporate roof: “It reminds me of that classic Warner Bros. line,” he said. “It’s the beginning of a beautiful friendship.”

AT&T had closed the $85 billion takeover of Time Warner in June 2018, promising cost reductions — which deals typically bring — but also revenue synergies and other benefits. That vision brought forth HBO Max in May 2020, a streaming service that, together with HBO, boasts 41 million domestic subscribers but trails Disney+ in rapid growth and Netflix in total scale. “Approximately 25 percent of HBO Max’s subscribers in the United States are via AT&T,” Kilar pointed out, adding: “HBO Max is proving to be a factor in AT&T’s consumer business — extended lifetimes, higher revenues, more efficient marketing.”

 

[TheBigA]

My sense is that AT&T would rather spin off the phone business.