AT&T Decides It’s Not A Media Company; Hilarity Ensues

Well, that didn’t take long. Not even three years after plunking down a cool $85 billion for what used to be called Time Warner (among previous other monikers from previous other bad deals later unwound), and then wading through a Justice Department antitrust suit, AT&T said, “Eh, never mind.” It’s getting, mostly, out of the media business.

Wall Street’s largely celebratory response to a planned spinoff/merger with Discovery Inc. was instructive, if cognitively dissonant. Shares went up, especially for new bridesmaid Discovery, which brings its eponymous lead network, Animal Planet, Food Network, HGTV, and the Travel Channel to the dance with CNN, HBO, Cartoon Network, TBS, and TNT. But, um, why?

Presumably the deal, like a previous spinoff of DirectTV (at a third of that company’s 2015 purchase price) will lighten AT&T’s extraordinary debt load and let it focus on the main thing it does, building a continent-girdling 5G wireless network to compete with Verizon (which just sold off its last content holdings) and T-Mobile (which just dumped its brief and ill-conceived venture into skinny bundles).

Maybe they were excited to see what Discovery CEO David Zaslav, a veteran media-company operator, can do with the resulting content giant. Maybe they think aging but wily media investor John Malone, who owns 28 percent of Discovery among other assets, has one more great deal in him. Perhaps together, investors expect the two will effectively run the show, or shows in this case, some 200,000 of them.

All that said, today’s announcement has spurred a whole bunch of other questions about the Great U-Turn, as this shall be known henceforth. To wit: