Asked what he would do if Judge Richard Leon blocks the merger, Stephenson was the epitome of cautious optimism.
“I don’t want to even go there,” Stephenson said, noting the judge had urged caution in public remarks. “Right now, we’re focused on winning this thing. That’s where we are.”
Stephenson revisited AT&T’s rationale for combining one of Hollywood’s premiere studios with the nation’s largest satellite television distributor and its second-largest wireless company. He said the combination would for the first time allow Time Warner to establish the kind of direct customer relationships that rivals like Netflix already enjoy and Disney is creating with its direct-to-consumer services.
AT&T’s customer insights and data, when paired with Turner’s inventory, could yield innovative new products — and yield new business opportunities.
“Can you a formidable ad inventory with a formidable amount of data, information about the customer, can you create something unique from a straight ad platform and change how you’re monetizing content?” Stephenson asked.
The dramatically changed media landscape provides the backdrop for AT&T’s ambitious deal. The ominously named FAANG gang — shorthand for the tech giants Facebook, Apple, Amazon, Netflix and Google — are investing billions in content, and are seemingly gaining market clout by the minute.
“I believe if you don’t create a pure vertical integrated capabilities — from distribution through content creation and ad models – you’re going to have a hard time competing with these guys,” Stephenson said.
Leon is expected to make a ruling June 12 in the antitrust case, which in some ways will set Stephenson’s legacy as he tries to transform the wireless carrier.
AT&T won regulatory approval for the $67 billion purchase of DirecTV, a deal that instantly ranked the company as largest provider of pay television services in the U.S. Its $39 billion deal for T-Mobile in 2011 didn’t fare as well.
In court, the telecommunications company argued that the AT&T-Time Warner combination would benefit consumers because it would enable the merged companies to more effectively compete with Silicon Valley companies like Google, Facebook, Amazon and Netflix. The Justice Department has countered that the nation’s largest satellite television provider might use Time Warner’s content as a weapon to disadvantage rivals.