Time Warner, the big media company, might be up for sale soon, and Apple is “staying extra close to any possible movement on this front,” the New York Post reported today (Jan. 13).
The supposed thinking is that Apple, which has struggled to get large media companies to buy into its vision for a streaming television service, would be able to kickstart it with Time Warner’s assets. These include the crown-jewel premium network HBO, the CNN news network, TBS and TNT, which have some sports contracts, and the Warner Bros. studio.
Could Apple buy Time Warner if it wanted? Sure. Apple has more than enough money. Time Warner has a market cap of around $57 billion, easily within Apple’s purchasing power, if it was approved. Apple doesn’t do deals this large—its biggest previous was Beats Electronics in 2014, for $3 billion—but there’s a first time for everything.
But should Apple buy Time Warner?
Probably not, and that’s why it likely won’t.
The most basic reason, as Re/code’s Peter Kafka notes, is that Apple already has access to HBO shows, via the HBO Now service, which it has already integrated into its Siri search and iTunes billing systems.
Actually owning HBO, meanwhile, would introduce an entire set of problems that Apple shouldn’t want to worry about, such as maintaining relationships with the cable and satellite providers that still generate the vast majority of HBO’s revenue.
More broadly, owning Time Warner would mean figuring out those problems for several cable networks, which seems like an unnecessary distraction. The Turner networks generate more than half of their business from cable and satellite subscription fees, and almost another half from television advertising—neither of which is a business Apple should be investing in.
Does Apple media head Eddy Cue really want to preside over winding down a cable group or shifting CNN to a digital business model? Those don’t sound like exciting projects—certainly not worth taking on for access to a few more TV shows. (And if Apple does buy Time Warner and jump into this situation, you’d really have to wonder if it’s losing its focus.)
To be sure, let’s assume it’s true that Apple is at least paying attention to whatever move Time Warner is considering. At Apple’s size, it makes sense to pay attention to a lot of things, especially regarding companies you work with. (For the record, an Apple rep declined to comment, and a Time Warner rep did not immediately respond.)
But this doesn’t seem like a likely combination. (Netflix, valued around $46 billion, might arguably fit better, but is still expensive and far-fetched.) More likely: Apple potentially bidding on streaming deals for NFL games.