Visitors Now:
Total Visits:
Total Stories:
Profile image
By ETF Daily News (Reporter)
Contributor profile | More stories
Story Views

Now:
Last Hour:
Last 24 Hours:
Total:

Netflix Is The Unlikely Winner Of The AT&T-Time Warner Merger

Monday, November 7, 2016 7:09
% of readers think this story is Fact. Add your two cents.

(Before It's News)

netflix-nflx-logoContrary to conventional wisdom, Netflix, Inc. (NASDAQ:NFLX) actually stands to benefit greatly from the AT&T-Time Warner merger. Here’s why.

Largely unknown to most investors, mega mergers with antitrust implications often require the approval not just of regulators, but of competitors across the industry landscape as well. Put simply, if AT&T and Time Warner’s biggest competitors give their OK, then regulators are much more likely to allow a deal to pass.

Those testimonials from the competition don’t come cheaply, however. Companies will often ask for big favors in exchange for their support of large mergers. And that’s great news for Netflix. From Bloomberg:

“The part you never see is what the various players demand behind the scenes in order to support the deal in Washington,” said Craig Moffett, an analyst at MoffettNathanson LLC. “You’ll have all kinds of programmers essentially demanding a pound of flesh. It’s a gravy train for everybody.”

“Netflix, for better or worse, will end up speaking on behalf of an entire class of would-be competitors,” Moffett said. “That gives them tremendous negotiating leverage for their support of the deal.”

The company’s influence can be huge. Netflix opposed Comcast’s proposal to buy Time Warner Cable in 2014, and regulators wound up blocking the deal. Later, TWC was purchased by Charter Communications instead, a deal that Netflix supported — likely in exchange for some form of preferential treatment.

Early indications are that Netflix will support the AT&T-Time Warner merger:

“We want to make sure it doesn’t give an unfair advantage to HBO,” Netflix CEO Reed Hastings said at a conference last month. “If it’s open competition, we love that.”

It remains to be seen what the company could receive in return for its blessing, but investors should expect some form of benefits coming Netflix’s way soon.

Netflix shares rose $1.87 (+1.53%) to $123.90 in premarket trading Monday. Year-to-date, NFLX has gained 6.69%.

NFLX-2016-11-07

You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)

Report abuse

Comments

Your Comments
Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

Top Stories
Recent Stories

Register

Newsletter

Email this story
Email this story

If you really want to ban this commenter, please write down the reason:

If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.