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Why Telecom’s Biggest Names Are Bowing Out of Hollywood

Photo by John Tuesday via Unsplash

Why Telecom’s Biggest Names Are Bowing Out of Hollywood

By Movieguide® Staff

AT&T’s recent deal with Discovery mirrors Verizon as the major telecom companies look to shift their focus away from Hollywood media.  

“The simple rule from the past 20 years is that telco and media assets generally do not mix,” Ian Whittaker, a London-based finance consultant, said, according to The Hollywood Reporter. “The mindset between the two sides is too different, and it always ends up with the telco companies regretting their purchase.”

The new relationship with Discovery will allow AT&T to “unwind much of the company’s vertically aligned strategy it had pursed the last seven years,” Cowen analyst Colby Synesael said. “[It] simplifies the story and will provide funding to AT&T to further invest in its two remaining connectivity focuses – mobility and fiber.”

THR reported

Much talk on Wall Street on Monday focused on whether the Discovery deal plan could lead Comcast to make a counter offer for WarnerMedia given the two companies have been mentioned by experts as a good fit. One Wall Street observer who didn’t want to be named said it “will be interesting to see whether leaking it to the press gets Comcast to the table, which is why I presume (AT&T) leaked it.”

CFRA Research analyst Tuna Amobi notes that AT&T’s spin off of WarnerMedia assets like HBO, Warner Bros. and CNN — which it bought for $85 billion in 2018 – is “consistent with its current strategic theme of ‘portfolio simplification’” after selling a 30 percent stake in DirecTV and its other video services, U-Verse and AT&T TV, to private equity firm TPG Capital in February in a deal valued at $16.25 billion. (In 2015, AT&T had bought DirecTV assets for $67 billion, including debt.)

Verizon took similar steps to drop their media assets – for example, Verizon recently offloaded news outlet HuffPost to BuzzFeed – and CEO Hans Vestberg noted the importance of investment.  

“Verizon Media has done an incredible job turning the business around,” Vestberg said. “The next iteration requires full investment and the right resources.” 

In that vein, Verizon recently announced a partnership with Disney, offering its wireless customers Disney+ and other services. 

However, some analysts see AT&T’s resources falling short. 

“AT&T doesn’t have the money to invest in 5G, streaming media, and consumer fiber all at the same time,” MoffettNathanson analyst Craig Moffett said. The Discovery deal will “refocus AT&T on their core telecommunications business.”

“AT&T has too much debt,” Bernstein analyst Peter Supino added

Now more than ever we’re bombarded by darkness in media, movies, and TV. Movieguide® has fought back for almost 40 years, working within Hollywood to propel uplifting and positive content. We’re proud to say we’ve collaborated with some of the top industry players to influence and redeem entertainment for Jesus. Still, the most influential person in Hollywood is you. The viewer.

What you listen to, watch, and read has power. Movieguide® wants to give you the resources to empower the good and the beautiful. But we can’t do it alone. We need your support.

You can make a difference with as little as $7. It takes only a moment. If you can, consider supporting our ministry with a monthly gift. Thank you.

Movieguide® is a 501c3 and all donations are tax deductible.


Now more than ever we’re bombarded by darkness in media, movies, and TV. Movieguide® has fought back for almost 40 years, working within Hollywood to propel uplifting and positive content. We’re proud to say we’ve collaborated with some of the top industry players to influence and redeem entertainment for Jesus. Still, the most influential person in Hollywood is you. The viewer.

What you listen to, watch, and read has power. Movieguide® wants to give you the resources to empower the good and the beautiful. But we can’t do it alone. We need your support.

You can make a difference with as little as $7. It takes only a moment. If you can, consider supporting our ministry with a monthly gift. Thank you.

Movieguide® is a 501c3 and all donations are tax deductible.