The federal court of appeals has approved AT&T’s acquisition of Time Warner for $85 billion, rejecting the Justice Department’s bid to prevent the
Time Warner now called WarnerMedia is the world’s third-largest entertainment company after Comcast and Disney. It owns Turner, home to cable networks and digital media properties such as CNN, TNT, and Adult Swim. It also includes Home Box Office (HBO), the company’s premium network that airs hit shows such as Game of Thrones; and Warner Bros., which produces and distributes television shows, movies, and video games.
This morning, AT&T spared no time and announced that it would rapidly make changes throughout the company’s entertainment assets.
Bob Greenblatt, NBC’s former executive, will now be the chairman of WarnerMedia Entertainment and Direct-to-Consumer, meaning its streaming services. That division will combine HBO with Turner channels TNT, TBS, and TruTV; plus, WarnerMedia’s forthcoming DTC (streaming) offering.
CNN president Jeff Zucker will oversee WarnerMedia’s News & Sports. That division now includes CNN and all its many sub-brands; Turner Sports; Bleacher Report; and AT&T’s four regional sports networks (RSNs), three of which branded as AT&T SportsNet.
Warner Bros. CEO Kevin Tsujihara will now also oversee Turner’s animation properties, which includes Cartoon Network and its merchandise and licensing arm, plus Turner Classic Movies.
“This change will provide the company with the agility and flexibility needed to build WarnerMedia’s brands across a variety of evolving distribution models with a more coordinated approach to the company’s original programming,” WarnerMedia announced.
AT&T also announced that with every merger, staff lay-offs is expected; now with all of the networks now linked closer together in the name of greater efficiency and streamlined operations. Moreover, AT&T has over $170 billion in debt but has suggested it will be able to pay off a good chunk of that with its usual profits, by cutting costs, and by offloading assets like WarnerMedia’s 10 percent stake in Hulu.
Greenblatt tried to get across that any job reductions won’t hamper WarnerMedia’s creative efforts. However, the changes in company management resulted in some of its previous long-time employees to resign.
HBO’s chairman and CEO Richard Plepler announced he would be stepping down from the position recently. He had been with HBO for 27 years but decided to leave with reports pointing to reduced freedom and autonomy under WarnerMedia
Plepler gave the green light to hits like Game of Thrones and Veep and was widely respected across the entertainment industry for his stewardship of HBO and its prestigious originals.
David Levy, Turner Broadcasting’s president, announced his exit last week as well, after a similarly long tenure with the company. Their departures make it easier for AT&T to focus on consolidation.
The decision to move forward with the merger were presided by a three-judge panel from the US Court of Appeals for the DC Circuit, which said on Tuesday that it does not plan to appeal the ruling. Jeremy Edwards, a department spokesperson, said, “We are grateful that the Court of Appeals considered our objections to the District Court opinion. The Department has no plans to seek further review.”
AT&T first announced its intention to purchase Time Warner, which included HBO, Warner Bros., and the Turner cable networks, in October of 2016. Just over a year later, the Justice Department sued to stop the deal on antitrust grounds, claiming that by owning Time Warner, AT&T would have “both the incentive and the ability to raise its rivals’ costs and stifle the growth of innovative, next-generation entrants.
The Justice Department claimed AT&T would have greater bargaining leverage over rival TV distributors because the company would have valuable live content from Turner’s networks, like the sports that TNT carries and CNN’s news coverage.
The Justice Department contended that AT&T could during negotiations threaten to “black out” Turner’s channels — that is, pull them from the rivals’ lineups — tempting customers to drop their current providers and switch to AT&T services like DirecTV. The Justice Department alleged that AT&T would also have the power to raise the prices its competitors pay for their content.
The companies argued during the trial that they have no incentive to trigger a blackout because they rely on subscriber fees and advertisements to make money, and dropping a distributor would cause their networks too much financial harm.
They also claimed that they need the merger to compete with the likes of Netflix, Google and Facebook, and to bring cost savings and innovations to their customers.
The AT&T acquisition of Time Warner is considered a “vertical merger” because it’s a content distributor, AT&T, buying a content producer, Time Warner. Typically vertical mergers are not given as scrutiny on antitrust grounds, because unlike a “horizontal merger” in which two competitors are combined, a competitor isn’t being taken out of the market. Time Warner’s business units, like HBO and Warner Bros., all remain in operation.
What’s The Next Move For Huawei?
Huawei assures users that they will still be receiving security updates and after-sales services amidst the Google/Android ban. Sources also revealed that company is poised to launch its own OS, Hongmeng, anytime soon. Click To Tweet
Following the decision of Google and Android to ban Huawei from contracting their services in conjunction of the government-led war against the Chinese tech giant and the executive order released by President Donald Trump, Huawei crumbles to assure users that current owners of both Huawei and Honor phones will still be receiving security updates and after-sales services.
In a short, unsubstantiated statement, Huawei highlight’s the company’s contribution to the growth of Android globally as Android phones from the company has seen unprecedented growth while other smartphone vendors are shrinking or stagnant. While the company promises the continuance of the services provided by Android to their smartphone users, and the promise extends to those units that were already shipped and in stock in stores globally, no additional guarantees were made beyond that.
“Huawei has made substantial contributions to the development and growth of Android around the world. As one of Android’s key global partners, we have worked closely with their open-source platform to develop an ecosystem that has benefitted both users and the industry,” said a statement from Huawei.
“Huawei will continue to provide security updates and after-sales services to all existing Huawei and Honor smartphone and tablet products, covering those that have been sold and that are still in stock globally […] We will continue to build a safe and sustainable software ecosystem, in order to provide the best experience for all users globally,” they added.
The revocation of Huawei’s license follows after the heightened crackdown by the U.S. government on Chinese companies. Previously, the Trump administration has been lobbying to its allies to ban Huawei’s 5G technology citing that the Chinese government can use the company for espionage and economic sabotage.
The latest blow against Huawei is the decision of Google to revoke the Android license of Huawei, forcing the company to use only the open source version of the operating system. A Google spokesperson confirmed that “Google Play and the security protections from Google Play Protect will continue to function on existing Huawei devices.”
Because of the ban, Huawei is now restricted from using the Android Open Source Project (AOSP), cutting the company off from critical Google apps and services that consumers outside of China expect on Android devices.
While existing phones from Huawei would probably be not affected by the decision, the future of updates and for those phones as well as any new phones Huawei would produce remains in question. But it seems like Huawei has prepared for the day that this would happen and already has a plan B in mind.
Earlier today, the China-based company released its very own operating system, Hongmeng. A source has confirmed that Huawei is set to officially launch Hongmeng, as the company has been working on it since 2012. The company has been testing the new OS on selected devices under closer door and closed environment. The source also said that the testing was accelerated for the new operating system to be ready for situations just like this.
Nonetheless, it is still unclear whether Hongmeng will be the official name of the OS from Huawei. Experts note that even if Huawei can successfully launch its operating system, the company will still be faced with the challenge of establishing an app ecosystem. It would take Huawei a lot of time to build apps that are compatible with the new operating system.
Huawei accounted for 19% of the worldwide smartphone market and became the second largest smartphone manufacturer, overtaking Apple, in Q1 2019.
The blunder faced by Huawei following the Google ban has caused severe market instability not only for Huawei but for the volatile US tech markets as stocks drop following the shocking decision. Huawei is dragging the entire tech industry with it as market uncertainty brought upon by the apparent tech trade wars. As Huawei’s future remains at the limbo, it brings with it the rest of the tech world.
“If this remains enforced, it’s going to create some opportunity, but companies are working with their compliance departments to get out of the way of this Huawei situation,” said Quincy Krosby, chief market strategist at Prudential Financial. That’s difficult because “Huawei has its tentacles in so many parts of the technology sector. That’s why this is not a one-day event.”
Nissan-Renault’s Ghosn: From Hero To Zero
In a time when Nissan was on the brink of declaring bankruptcy, Carlos Ghosn stepped in not only to save the company but help it to rise back as one of the world’s top car manufacturers. Today, Nissan is facing a similar financial crisis, but this time around, the Japanese carmaker had Ghosn removed from the company.
Through Ghosn’s efforts of restructuring and eventually, reintroducing innovations to Nissan, the company rose significantly within the last two decades under Ghosn’s lead. He also made the Nissan-Renault-Mitsubishi agreement possible that made them one of the leading car companies in the world.
The company had a good track record. But, CNN reported last Tuesday, May 14, that Nissan posted a significant drop in profits where operating profits plunged to 45% at 318 billion yen ($2.9 billion) in the fiscal year that ended in March and revenue fell 3% to about 11.6 trillion yen ($105 billion), while vehicle sales were down 4.4% to 5.5 million.
This is “rock bottom,” Nissan CEO Hiroto Saikawa said during the earnings presentation.
Moreover, analysts also expect Nissan to plunge at decade-low numbers in the coming year. Nissan forecasts operating profit for the fiscal year to March 2020 would fall to 230 billion ($2.1 billion). Also, Nissan shares closed down at 3% in Tokyo.
On Friday, May 17, the Japanese carmaker proposed plans to make changes within its executive board as a reaction to Ghosn’s fallout from the company.
The firm told shareholders that they would start implementing a new board structure composed of 11 members, which 6 of whom would be external.
“With the lessons from the recent executive misconduct still fresh, Nissan resolves to rigorously pursue the separation of supervisory and executive functions,” said the firm.
Thierry Bollore, Renault’s chief executive and chairman Jean-Dominique Senard will both be included in the proposed board.
Nissan conceded to allowing Senard into the board though Bollore’s urges. The Japanese firm isn’t too happy about Senard siding with Ghosn during his arrest.
On the other hand, Nissan’s current CEO Hiroto Saikawa has also been reported to be pressured from vacating his position in the company for doubts that he is capable of turning things around for the company and his close relations with Ghosn.
Saikawa responded that he wishes to stay on the company until he sees it return to profitability and will consider the idea of stepping down “at the appropriate time.”
Additionally, Saikawa told reporters that Renault chairman Senard “has one idea in mind, which is integration or merger.” He also added that “what we’ve told Mr. Senard is this is not the right timing to discuss this matter.”
Regarding the topic of a possible merger between Renault and Nissan, the Japanese company seems to be against the idea since Nissan brings in a lot more profitable compared to the two. But, ironically, Renault holds more stake in the company.
Obviously, the Japanese brand has been struggling to manage internal structures with Ghosn leaving its ranks for multiple cases alleging financial misconduct.
Allegedly, Ghosn is accused of abusing and taking advantage of his power and position in the company to meet personal gains. Specifically, Ghosn allegedly used a Nissan subsidiary to send millions of dollars of payments to a business partner of the company abroad, which then sent money to a third company that he controlled. The actions were taken for the purpose of obtaining a “personal profit,” The New York Times reports.
Prosecutors accused Ghosn of using the method on three occasions from December 2015 to July 2018, resulting in a total of $5 million in losses to Nissan.
As of date, Ghosn has been arrested on four separate occasions including the first arrest in November on charges of underreporting his compensation. The second when he was rearrested on related charges and then a third time on suspicion that he had shifted his personal financial losses onto Nissan’s books.
However, Ghosn and his team of lawyers have consistently denied all allegations about him. In a video Ghosn posted before his fourth arrest, he told that the allegations made against him “is about a plot, this is about conspiracy, this is about backstabbing.”
Meanwhile, the French carmaker, Renault also made new allegations against Ghosn, claiming that there were “questionable and concealed practices” regarding the expenses made under Ghosn. Moreover, Renault also announced Ghosn’s resignation from its board.
Facebook Opens A Swiss Company To Develop Own Virtual Currency, Report Suggests
There is no denying that cryptocurrency is slowly becoming the most used currency in the world. The future is bright for virtual money as people started to become a lot more dependent on the internet on almost all aspects of their daily lives. And when a technology thrives, Facebook does not falter to offer the same thing. Reports suggest that Facebook has set up a company overseas to develop its virtual currency that users can send to their friends and contacts.
The social networking giant reportedly opened up a company in Switzerland to focus on payment and blockchain technology, similar to the technology that powers bitcoins and other cryptocurrencies.
According to a Swiss publication, Handelszeitung, the Facebook cryptocurrency would be tied to the US dollar and therefore will remain stable unlike bitcoin, which started crashing since 2017.
The report also revealed that Facebook has already set up a company called Libra Networks in Geneva several weeks ago. They noted that Libra is the tech giant’s internal project name for Facebook money.
Owned by Facebook Global Holding II in Ireland, the Swiss company will focus on developing the software and hardware for crypto-related functions like payments, blockchain, analytics, big data, and identity management.
Facebook is hesitant to comment regarding their plans for the digital currency and did not confirm nor denied the reports of its existence. Nonetheless, the news is consistent with an earlier report that Facebook created a team of 50 individuals to develop their cryptocurrency and blockchain technology to be used across the network and on its WhatsApp messaging services.
That design would be geared toward avoiding a speculative frenzy like the one that caused the value of the primary cryptocurrency, bitcoin, to soar and then crash. While Facebook also did not confirm anything related to the leaked project at the time, the California-based company confirmed that they are interested in blockchain technology.
“Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology,” the company said in a statement. “This new small team is exploring many different applications.”
Blockchain technology serves as the virtual ledger for every transaction using a cryptocurrency like bitcoin, and it builds up a set of data blocks recording transactions and who made them.
Meanwhile, existing crypto companies still face a huge problem in the banking system, and Facebook may face a similar obstacle in case the reports on its own crypto money turns out to be true. Earlier reports suggest that crypto companies around the world are having trouble in opening bank accounts for their operations.
The report followed the complaint filed by Sam Bankman-Fried, Chief Executive Officer of the quantitative crypto company, Alameda Research that “the standard answer of ‘just go to your local Chase branch’ doesn’t work in crypto.” Bankman-Fried also added that it is not illegal for banks to serve crypto businesses, but “it’s a massive compliance headache that they don’t want to put the resources in to solve.’’
The report pointed out that while larger banks avoid getting into a transaction with crypto and blockchain corporations, smaller banks are getting hold of the unserved market.
Silver Bank in San Diego said in its November 2018 filing for an initial offering that cryptocurrencies companies have a total of $40 billion to deposit and larger banks are letting go of it.
Blockchain investment, trading, and advisory firm NKB group have also struggled with establishing banking relationships with a lot of major banks. According to NKB Group’s head of Brokerage Ben Sebley, “denying basic banking is madness, impedes sector growth and forces companies to get creative to solve the problem […] The banks are being overly prudent.”
The facilitation of cryptocurrency in banking has been an ongoing debate after major banking giants like JPM, and other American banks have banned the purchase of cryptocurrency using their debit and credit cards. However, supporters have argued that this ban is a step back for the banking industry.
“If they are policing digital currency transactions by de-risking the activity on the basis of protecting customers from market changes, they are going to be on the hook for market changes where their financial products are used where they did not intervene and de-risk to protect consumers,” said attorney Christine Duhaime, founder of the Digital Finance Institute.
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