In AT&T Deal, Bankers Guaranteed To Benefit

In AT&T Deal, Bankers Guaranteed To Benefit As Consumers And Shareholders Hope For Best

On Monday, the German giant [Deutsche Telekom] announced it's selling the offspring of that [$51 billion] deal -- T-Mobile USA -- to AT&T for $39 billion.

That 2000 investment -- now worth about 40 percent less after adjusting for inflation -- has cost Deutsche Telekom and its shareholders dearly. The benefits for the American public, which were widely touted at the time as the German company fought for regulatory approval, are debatable.

And while it remains to be seen whether the same purported "synergies" and "cost savings" that were peddled in 2000 will ultimately benefit AT&T's shareholders who are being promised the same thing, bankers once again are poised to strike it rich. Bankers' fees will roll in regardless of whether their advice will ultimately benefit their clients.

"When you look at investment bankers, their job is to put buyer and seller together," said Matt McCormick, a portfolio manager at Bahl & Gaynor, which oversees about $3.2 billion. "Much like a real estate broker, if you're trying to buy a house, does the broker really care if you're in a ranch, or a two-story home, or with a pool or not? They are only paid if a deal gets done."

AT&T's shareholders are cool to the idea. McCormick, who oversees about 500,000 shares of AT&T for clients, said the benefits of the deal are "yet to be seen." Shares in AT&T are up 0.6 percent since Friday.

Bankers will probably pocket about $120-140 million off the AT&T and T-Mobile deal, according to Teck-Tjuan Yap, managing director at Freeman Consulting Services.

http://www.huffingtonpost.com/2011/03/2 ... 39410.html


In a nutshell, consumers will have fewer choices when it comes to wireless service, and the price goes up. But, hey, as long as the bankers make out like bandits by passing the garbage around (but never creating anything), then the good ol' "capitalism-at-any-cost / screw-the-consumer" machine just rolls on, right?

If the deal is approved. Personally I don't like it, ATT's network is already overloaded and adding the T-Mobile customers will only use up more capacity. And I don't like the idea of less competition for the mobile customer. Capitalism works best when you have lots of choices in suppliers.
If ATT, Sprint & Verizon are the only game in town, it is that much easier for them to collude on service and phone pricing.

LJ, It pains me to say it, but you're right.

I have seen the light, you've finally convinced me.

I'm going back to school to become a banker.

Nobody that matters wrote: LJ, It pains me to say it, but you're right.

I have seen the light, you've finally convinced me.

I'm going back to school to become a banker.

Funny, that's the first thing *I* thought... "I'm obviously in the wrong line of work..." I think I should be a banker... At least there you get PAID for screwing people....

Win, lose or draw the banker always makes out kind of like Real Estate agents.

Ice wrote: Win, lose or draw the banker always makes out kind of like Real Estate agents.

But not quite as much as scumbag lawyers. Just curious what the solution is here...should we have the government buy up all the banks and phone companies so the brilliant minds in Washington can right all the wrongs. I'm serious here, what is the answer to your outrage LJ?

I would start by EXPANDING the Financial Regulations that the banks are fighting so hard to block. I would FULLY FUND and stop the attacks on the new Consumer Financial Protection Bureau and Elizabeth Warren. The very fact that the banks and financial institutions are totally apoplectic about the regulations should be enough to tell you that it's the very thing we need.

SS109 wrote: If the deal is approved. Personally I don't like it, ATT's network is already overloaded and adding the T-Mobile customers will only use up more capacity. And I don't like the idea of less competition for the mobile customer. Capitalism works best when you have lots of choices in suppliers.
If ATT, Sprint & Verizon are the only game in town, it is that much easier for them to collude on service and phone pricing.

SS remember they will also take over the t-mobile network system also (towers etc.). There was a story about what you have stated though, that it will overload the ATT network. It will be interesting to see what happens.

Is it just me, or does it seem that we are slowly, but surely, consolidating corporate power into fewer and fewer hands. There was a time in this country we encouraged competition, even passed laws to keep this very consolidation from happening. I don't think it is in this nation's, or the consumer's, best interest to have mega companies, especially in the utilities. Follow the money, and it always leads back to a few, not many, hands. It doesn't surprise me at all that bankers stand to reap the harvest of this deal.

archer wrote: Is it just me, or does it seem that we are slowly, but surely, consolidating corporate power into fewer and fewer hands. There was a time in this country we encouraged competition, even passed laws to keep this very consolidation from happening. I don't think it is in this nation's, or the consumer's, best interest to have mega companies, especially in the utilities. Follow the money, and it always leads back to a few, not many, hands. It doesn't surprise me at all that bankers stand to reap the harvest of this deal.

Nope, it's always been that way. There's always been Astors, Rockefellers, Gates, etc willing to take up the mantle of 'super rich'.