Senators accidentally call Time Warner Cable CEO to testify

AT&T has been forced to explain the difference between Time Warner and Time Warner Cable

Financial trends and news by Steven Loeb
October 28, 2016
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It's a little confusing to most people, but Time Warner Cable and Time Warner are not the same company.

Time Warner Cable is the cable and telecommunications company that Comcast tried to buy for $45 billion a couple of years ago. Time Warner, on the other hand, is a media conglomerate, that owns, among other things, HBO and Warner Bros. Entertainment. It is currently in the process of being sold to AT&T for $85.4 billion.

Two different companies, with two different CEOs. So, take a guess which one the Senate decided to call up to testify in an antitrust hearing about the recent AT&T acquisition. Yup, you guessed it.

Instead of calling Jeff Bewkes, CEO of Time Warner Inc., a release from the Senate Judiciary Antitrust Subcommittee instead called for Robert Marcus, who is the CEO of Time Warner Cable. 

“Both Randall Stephenson, the CEO of AT&T, and Robert Marcus, the CEO of Time Warner, will testify,” it said in the release, sent out by Senators Mike Lee of Utah and Amy Klobuchar of Minnesota, the chairman and ranking member of the Senate Judiciary Subcommittee on Antitrust, along with Iowa Senator Chuck Grassley, and Vermont Senator Patrick Leahy.

The committee seemed to quickly realize its mistake (though you have to wonder who got fired for that blunder) and they rereleased it with the correct name, asking for Bewkes to come testify instead.

The confusion over the two companies is enough that AT&T actually had to file with the Securities and Exchange Commission, explaining that it is not actually buying Time Warner Cable as part of this deal.

“Time Warner Inc. should not be confused with Time Warner Cable, which is a distinct, independent company owned by Charter Communications,” the company wrote. 

“In 2008, Time Warner and Time Warner Cable announced a complete legal and structural separation of the companies. That separation was completed in 2009, and the companies have been completely separate and independent entities ever since.”

Not too long ago I accidentally got confused by two companies with the same name, one of which had been acquired. I felt kind of dumb at the time, but now that actual United Senators did the exact same thing, I don't feel anywhere near as bad about it. 

The AT&T/Time Warner merger

The deal for AT&T to buy Time Warner is stock-and-cash transaction that is valued at $107.50 per share, bringing the total price to $85.4 billion. 

The agreement has been approved unanimously by the boards of directors of both companies, but still has to go through regulatory approval by the U.S. Department of Justice, and, potentially, the Federal Communications Commission, who have to determine if the deal creates a monopoly.

Through this deal, AT&T would be getting its hands on a whole host of big properties, including HBO, and its streaming services HBO Now and HBO Go.; Warner Bros. Entertainment, which includes Harry Potter and DC Comics; Turner, which consists basic cable networks including TNT, TBS, CNN and Cartoon Network/Adult Swim, along with the NBA, March Madness and MLB.

Time Warner also has invested in digital media properties such as Hulu, Bleacher Report, and Fandango.

AT&T and Time Warner are currently determining which FCC licenses, if any, will be transferred to AT&T in connection with the transaction. To the extent that one or more licenses are to be transferred, those transfers are subject to FCC review.

The transaction is expected to close before year-end 2017.

Almost immediately after it was announced, the deal came under scrutinty from presidential candidates, senators and even AT&T's rivals.

“As Chairman and Ranking Member of the Antitrust Subcommittee, we have carefully examined consolidation in the cable and video content industries to ensure that it does not harm consumers. An acquisition of Time Warner by AT&T would potentially raise significant antitrust issues, which the subcommittee would carefully examine," Lee and Klobuchar said in a statement the next day, while also promising that there would be a hearing.

That hearing is now slated for December 7th, granted they get the right Time Warner CEO to show up.

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