[opendtv] Re: News: Time Warner Offers $3 Billion to End AOL Hangover
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Mon, 8 Aug 2005 08:02:38 -0400
At 5:46 PM -0700 8/6/05, John Willkie wrote:
>so, that puts the net purchase price at about $16 billion, doesn't it? 6
>billion purchase, 3 billion shareholder payout, and at least 6 billion in
>write downs.
>
>And, they never were able to do a single thing that they suggested --
>synergy -- but they did try a walled garden.
The write downs would have happened anyway, as the book value of Time
Warner was highly inflated. All of the other major congloms have
taken similar write-downs related to over-valuation of assets and
huge losses on contracts such as NFL rights.
And the reason that they never did what they suggested was because
the acquisition caused a civil war, and the TW folks sacrificed the
company to prevent Steve Case from taking it in a new direction.
Their strategy seems to have worked for now, but you can expect more
write downs over the next decade as the broadcast side of the
business tanks, and the cable side suffers from competition.
Regards
Craig
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