In what could be a blockbuster deal, Apple is allegedly mulling over a purchase of Time Warner. The one-time cable giant is getting pressured from investors to either spin off some of its assets or sell itself entirely.
According to the NY Post, and sources familiar with the situation, Apple is one of a few companies that would be interested if Time Warner decides to make a move. The other companies are AT&T, which already owns DirecTV, and Fox.
Apple might be interested in Time Warner in order to support a possible TV streaming service. The Cupertino company was expected to launch such a service last year, but it was supposedly delayed until this year. According to sources, negotiations with the TV networks were going slower than expected.
A deal with Time Warner could speed things up since the company owns CNN, TNT, TBS, NBA TV, Cartoon Network, HBO, as well as Warner Bros. movies and TV shows. However, Apple would still need to negotiate with major networks like ABC, CBS, NBC, and Fox.
Apple already has its own Apple TV set-top box, which is now in its fourth generation. Users can already stream on-demand content from major apps like HBO Go, WatchESPN, MLB.TV, and others. However, rumors indicate Apple wants to offer a package deal similar to Sling TV, which costs only $20 per month for about 20 major channels. Sony’s PlayStation Vue is another similar offering, but it’s more expensive. Amazon is also rumored to be planning to launch its own TV streaming service, but the company wasn’t mentioned as a possible buyer of Time Warner.
All of this is hearsay at the moment, and moreover it’s contingent on Time Warner’s willingness to sell. The company’s board already turned down an offer 18 months ago from 21st Century Fox for $85 per share. Yesterday’s closing price of $71.06 is well below that, and according to sources, closed-door meetings with investors earlier this week revealed that CEO Jeff Bewkes is against a sale or spinoff of HBO because “splitting up can destroy value.” However, according to the Post, two longtime investors are just about out of patience and would support a breakup or sale of the company.
A source close to Apple told the Post that Eddy Cue, senior vice president of Internet software and services at Apple, is supposedly keeping tabs on the proceedings at Time Warner. Meanwhile, both Apple and Time Warner declined to comment about the rumor.
We will have to keep an eye on this one because it could change things dramatically in the entertainment world if Apple is really interested in purchasing Time Warner.