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AT&T And Time Warner Will Collapse Under The Weight Of This Merger

So AT&T and Time Warner, Inc. are merging to create a behemoth media company. AT&T is getting the rights to a lot of great intangible assets that cannot be easily recreated, such as cable T.V. shows (specifically, shows on HBO, TNT, TBS, and CNN, amongst others), and a slew of movies (my personal favorites include the Dark Knight trilogy and the Harry Potter movie series, amongst others).

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There are so many companies under the “Time Warner, Inc.” name that I can’t even begin to figure out the many ways that this merger will help AT&T.

I also believe that this merger will eventually cause the combined company to collapse. $85.4 billion is a huge amount of money, no matter who you are.  I don’t know how AT&T will be financing the purchase, but I imagine that some portion of it will either be debt or equity (shares). AT&T will either owe a lot of money to their lenders, or will have to appease a lot of shareholders.

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Their fate will be similar to that of Sears – Kmart, which is on the brink of bankruptcy. AT&T Time Warner will be a huge company with a lot of overhead and expenses.

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