By The Editorial Board, Wall Street Journal
AT&T ’s acquisition of Time Warner three years ago was supposed to entrench its media empire—or at least that was the theory of the Trump Justice Department. Well, both AT&T’s media empire and the government’s antitrust case have now unraveled.
The telecom giant announced plans on Monday to spin off and combine its WarnerMedia assets with Discovery. The spinoff will free up cash for AT&T to pay down its staggering $169 billion in debt from its acquisitions of Time Warner and DirecTV in 2015 and invest more in its broadband network. The transaction is an implicit admission that the acquisition was a strategic failure.
AT&T’s motivation for buying Time Warner was to mine user data to better target ads at viewers. Justice argued in its lawsuit that AT&T would use “its control over Time Warner’s valuable and highly popular networks to hinder its rivals” and “impede disruptive competition” from “emerging online competition.”
