Top Stories
Top Stories
Deals and IPOs

Former AOL chief: Here's why AT&T-Time Warner is different from the AOL deal

Miller: ATT-TWX deal will likely have pretty strong restrictions

The AT&T-Time Warner mega-merger making headlines Monday morning may have echoes of the failed Time Warner-AOL combination in 2000, but the two are different in both makeup and mission, former AOL Chief Executive Jonathan Miller said Monday.

"I think the AOL and Time Warner merger was basically trying to merge a legacy company with a disrupting company. That's really hard," Miller told CNBC's "Squawk on the Street."

"Here, you're talking about, essentially, two legacy companies that are both facing challenges that they recognize and are trying to come together to be better for it. I would give that a higher chance [of success]," he said.

On AT&T's side, prices for devices, bandwidth and connectivity are all slumping, Miller said, leaving room for money to come from content creation and distribution.

There is a certain territoriality about content in the media business which makes this deal potentially lucrative, Miller, who is a partner with Advancit Capital, said.

"What's on HBO is on HBO. What's on Showtime is on Showtime. What's on Netflix is on Netflix," Miller said. "There's been a history in the … video content business around exclusivities, and consumers have accepted that and pay for multiple services."

The main issue with deals like this, Miller said, is more and more companies eventually "wanting in" to the prospective successes of media content distribution.

Not only telecommunications companies like AT&T, but technology companies and non-U.S. companies have been flirting with entering the space, he said, and seeing deals like Comcast-NBCUniversal and AT&T-Time Warner go through may prompt them to finally do so.

"You have a lot of pressure, and if you're a stockholder, I would think maybe good pressure against these large-cap media stocks where people want in. And I think if you're AT&T, they wanted to get ahead of that," Miller said.

Kawaja: AT&T-Time Warner deal 'deja vu all over again'

Terry Kawaja, who led the AOL-Time Warner deal in 2000 while running global media M&A at Citi, said Monday that this deal will surely face a significant number of hurdles before closing.

Kawaja, founder and CEO of Luma Partners, told CNBC's "Squawk Alley" that antitrust obstacles and worries about eliminating competition will undoubtedly surface among regulators, but at the end of the day, he thinks the deal will go through.

"There's always a political undertone to these considerations, and that is just a function of the time," he said. "What period are we in, what era are we in, what do politicians and policymakers have to take a stand about?"

But, so long as AT&T and Time Warner are patient, Kawaja is confident on the deal being approved, especially with the two latest mergers in the media and telecom space serving as precedent.

Using a poker metaphor, Kawaja painted this picture: "Comcast and NBC, you could call that a pair of queens. Then along comes Verizon and [Yahoo], a jack high, maybe, and AT&T is hoping this is a mitt full of aces in the sense that they're going after premium and they're going after scale."

Disclosure: Comcast is the owner of NBCUniversal, the parent company of CNBC and