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Possible AT&T, DirecTV deal could impact Maryland consumers

Two big-name providers in the television market may be coming together, as AT&T and DirecTV were scheduled to meet on May 18 to discuss a possible merger. According to reports, the deal may involve AT&T paying DirecTV close to $50 billion, with the individual share price coming in somewhere in the mid-90s.

If the merger goes through, AT&T would stand to gain around 26 million subscribers to pay TV and a good standing in a media market that is becoming increasingly focused on video delivery. DirecTV would also benefit from the deal, as it has not had a history of competitive Internet broadband service and subscriber growth has slowed in recent years.

This isn't the first time that AT&T has tried to absorb another company. AT&T had hoped to gain T-Mobile in a reported $39 billion deal three years ago, but the Justice Department rejected the proposal. AT&T was also reportedly considering bidding on Vodafone Group, a European company, but decided to remain focused in the U.S. after the announcement of the Comcast/Time Warner Cable deal.

The AT&T and DirecTV merger is just another in the line of announcements as media companies across the country are starting to consolidate voice, data and video services. The last major agreement announced involved Comcast and Time Warner Cable, and it is possible that other companies will be following suit in the future. Mergers can be beneficial business deals for both companies involved, but it is crucial that a Maryland business owner considering purchasing a business understand everything involved in the agreement and the possible future implications.

Source: The Wall Street Journal, "AT&T, DirecTV to Meet Sunday to Approve Deal to Merge" Thomas Gryta, Shalini Ramachandran and Dana Cimilluca, May. 17, 2014

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