SEC Filings

425
AT&T INC. filed this Form 425 on 11/09/2016
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Someone who's been in business for 140 years and hasn't missed a bond payment, in interest payment, or dividend payment, it's a pretty good record. So we feel very good about it.

Our conversations with the bankers and the evaluators of the debt markets have left us with great confidence that we can handle this very methodically and very prudently.


Jennifer Fritzsche^ What about -- just sticking with DIRECTV and then we'll get to DIRECTV Now -- content costs? Not to be a Negative Nancy but some naysayers might say: Well, AT&T hasn't felt the Hollywood love, and that's why they're going down the direction of Time Warner.

Can you talk about content costs, if those have -- because it's kind of been removed from the conversation a little bit versus when the deal was first announced. Is that because you just can't announce a lot of these deals you've already inked, or how has that progressed?

John Stephens^ I think there have been a lot of announcements, mainly by the content providers themselves. We'll let them take the lead on that.

Jennifer Fritzsche^ Okay.

John Stephens^ But no, our content costs, we have managed those well. We're hitting our targets.

Time Warner is about premier content: the best brands, the best full source of over-the-top with HBO, in our networks with TBS, TNT, CNN, Cartoon Network.

Jennifer Fritzsche^ I would say there are a few Cartoon Network watchers --

John Stephens^ Their studios, with Warner Bros.; their library. It's all about premier.

And as I said earlier, mobile is all going video and video is all going mobile. And we've got a great distribution capability both satellite, wired, and specifically wireless.

Now we're going to have a premier -- the premier content Company. It's a great match.

Jennifer Fritzsche^ As we look at that, and it brings in the discussion of DIRECTV Now. Your Chairman recently announced a $35 price point. We haven't seen that hit the market for DIRECTV Now with 100 channels.

Almost some would call this a loss leader, an aggressive price point here. Is it, one, still going to be profitable?

And then are you willing to accept these thin margins? Because the obvious next question is: What about worrying about cannibalizing your own base?

John Stephens^ Yes. First and foremost, this product is targeted toward those 20 million or more households that don't have a pay-TV subscription today. So it's an underserved market at least from our perspective in the sense of what we provide.
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