Verizon CEO praises AT&T’s Time Warner deal, says buying Yahoo still makes sense

It’s not often that large telecommunications companies show a little brotherly love. But speaking today at the Intel Capital Global Summit, Verizon CEO Lowell McAdam praised AT&T’s pending $85.4 billion acquisition of Time Warner, comparing it to his company’s likely $4.8 billion purchase of Yahoo and framing both moves as content-driven. “It makes very good sense for AT&T. We’ve gone the digital media route, and they’re going the traditional media route,” McAdam said.

Previous moves by telecommunications firms — often called “carriage” companies — to buy content companies were often seen as a vain attempt to add value and become more than just so-called dumb pipes. More recently, however, as the media landscape has shifted and content creation itself has become more vertically integrated with distribution, it’s the media companies whose values may need the boost.

“I wasn’t surprised at all,” McAdam said of his reaction upon hearing the AT&T- Time Warner news. He recalled the failed attempt by Fox to buy Time Warner in 2014 and said of the current deal, “I’m just surprised it took so long.”

Meanwhile, McAdam said little about the possible impact of the recent hacking scandal on his company’s bid to purchase Yahoo or whether he would pursue a lower purchase price. He described ongoing forensic examinations into the hack, which affected 500 million accounts, and said the results were still several weeks away. “We’ll make a determination about the impact on the deal in a few weeks time,” McAdam said. “The industrial logic of combining Yahoo and Verizon still makes a lot of sense.”