The AT&T-DirecTV merger – the big get bigger

Fact: The communications industry is big business. Converged communicators who have been in any number of recent classes – COM3332 (New Communication Technology in Contemporary Society), MMC3200 (Law and Ethics in Communication), GEB3373 (International Business), and more – know this fact well. We’ve also seen how the trend of conglomeration, with its vast array of effects, has transformed the media landscape in the last 20 years to one increasingly dominated by a small number of very large companies. But even “very large companies” can get “very larger” (not actually a valid English construction). Case in point: Today’s announcement, as reported by the New York Times, that AT&T is planning to acquire DirecTV.

 

Just how big is this deal? Early reports indicate that the purchase will cost AT&T about $48 billion (with a B), a huge number. Counting debt now assumed by AT&T, the total value of the deal is close to $67 billion. For that price, AT&T could have bought about 150,000 Ferrari F12berlinettas (valued at about $447,000 apiece) or 3 billion copies of Lev Manovich’s The Language of New Media (assuming that many had ever been printed in the first place, which is not the case). Why didn’t AT&T just splurge on fancy cars or try to corner the market in media theory texts? The answer is that AT&T believes DirecTV will be worth a lot, bringing a giant return on investment.

 

Although it’s impossible to say for sure, experts tend to believe that the government will not oppose this acquisition. In fact, antitrust regulators might even welcome the purchase, because it will create a massive non-cable conglomerate that could act as a check on Comcast, which recently acquired Time Warner in a similar deal within the cable industry. In any case, it’s an example of how mega-money operates in the new world of communications. In today’s media, there’s always room for the big to get bigger.

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