The telecom would keep the Turner, Warner Bros. and HBO brands following a deal, as it did with satellite television group DirecTV following its 2015 acquisition. However, the New York Times reports that AT&T would not keep parent company Time Warner's brand.
If At&T's deal for Time Warner is approved, Bewkes plans to leave as CEO and Time Warner name likely will go away https://t.co/TtTNabL1hq— Sydney Ember (@melbournecoal) July 24, 2017
Tossing the Time Warner name from the marquee would mark a big change from one of the telecom's formative deals a little more than a decade ago.
Back in 2005, acquisitive Baby Bell SBC Communications Inc. set its sights on the former AT&T Corp., a struggling long distance and business telecom. The AT&T brand had been tarnished following declines in its business and a reorganization that resulted in the divestiture of the wireless and broadband operations in 2002 and 2003.
However, the thinking was that the American Telephone and Telegraph brand, which dates to 1885, was so well-known around the globe that it was worth more than SBC's own name, which stood for SouthWestern Bell and had an inherently parochial ring. The buyer ultimately took on the AT&T name, which SBC Chairman and CEO Ed Whitacre called "one of the world's strongest brands."
AT&T boss Randall Stephenson presumably sees less value in the Time Warner brand.
AT&T is number 12 on the Forbes list of the most valuable brands in the world, worth an estimated $36.7 billion. Apple (AAPL - Get Report) , Alphabet Inc.'s (GOOGL - Get Report) Google and Microsoft (MSFT - Get Report) top the list, with brand valuations of $170 billion, $101.8 billion and $87 billion, respectively. Disney (DIS - Get Report) (no. 7, $43.9 billion brand value), ESPN (no. 32, $15.8 billion) and Fox (FOXA) (no. 56, $10.7 billion) are the only legacy media brands that Forbes names. Time Warner did not even make the list.
While Time Warner is neither as old nor as valuable as the AT&T brand, its legacy is nothing to sneeze at.
Henry Luce and Briton Hadden founded venerated publisher Time in 1922. A year later, brothers Albert, Sam, Harry and Jack founded Warner Bros. The companies merged in 1990.
Confusion with some of the other former Time Warner companies should not be a long-term issue for AT&T.
Time Inc. (TIME) , which was spun out in 2014, still exists, but could soon exit the market. Jana Partners pushed the publisher to consider a merger with Meredith Corp. (MDP - Get Report) recently, though Time broke off talks in April. The New York Post reported that Verizon Communications Inc. (VZ - Get Report) had interest in Time. While a Verizon purchase of Time could create brand confusion with AT&T-Time Warner, a deal is not likely.
As AT&T pads its portfolio with media assets, it will inevitably face some tough decisions about branding its new businesses.
AT&T declined to comment for this story.
The telecom may already have enough brand equity. Besides, "American Telephone & Telegraph & Time Warner Inc." would probably be a little bit much.
Editors pick: This story was originally published July 24