Yes, the GOP presidential candidates debated again last night, and yes, a Florida judge at least momentarily delayed the return of Elián González to Cuba, and yes, the Supreme Court says Microsoft has to let its temp workers in on its good-deal stock purchase plan, but everybody leads with yesterday's surprise announcement of AOL's purchase of Time Warner, the first acquisition of an old media company (co-founded 75 years ago by Henry Luce) by a new media one (only 15 years old), the largest media merger of all time, and indeed, the just-plain largest merger of all time. Although there isn't complete agreement about how large: The Washington Post says the purchase value of the stock is $183 billion. The New York Times says $165 billion. The Los Angeles Times says $163 billion. USA Today says $160 billion. And the Wall Street Journal says $156 billion. The NYT says the deal will produce the fourth-most-valuable company in the country, one with a stock market value "roughly equal to the gross domestic product of Mexico." (Next week's big story: "AOL TIME WARNER DOUBLES SIZE, ACQUIRES MEXICO.")
The coverage agrees on the basic logic of the deal: In one swell foop, TW gets a tremendous Internet presence for marketing, for instance, its books and CDs; AOL gets a wide range of content in the form of TW's many media properties, ranging from HBO to CNN to Time magazine; and AOL goes from having no broadband capability to being positioned to go into computers in the homes wired by the nation's No. 2 high-speed cable provider, Road Runner, which TW is the half-owner of. The papers say that there now will be a spate of other old-new media merger deals, so that rival companies can compete against this newly integrated juggernaut.
The WP points out that AOL has only one-fifth the revenue of TW, but it was able to handle the deal because it has four times as much profit and a much higher stock value. The papers all reflect a sense that nonetheless it was surprising to think that the young company was buying the old one instead of vice versa.
As is typical of press coverage of mergers, breathlessness is the order of the day. The LAT runs at least eight stories on the deal, the NYT at least 12. USAT goes with special reports in each of its four sections. Its front-page "cover story" compares the deal to the American colonies' defeat of the British. The LAT seems completely out of step when it bothers to point out that because of the debt the new company will take on to seal the deal, it could be decades before it reports a profit.
Several papers take a crack at turning the spreadsheet into a novel, centering on the characters of AOL's Steve Case, who will be the chairman of the new company and TW's Gerald Levin, who will be its CEO, with the WP putting the most effort into it. The Post's tale includes Levin's decision-making "walk in the woods" and the code words and letters used to keep doings confidential. Case gets the papers' instant cult of personality treatment: Everybody notes that he likes casual clothes (although he wore a suit to the press conference and it was Levin who showed up all caj and tieless) and used to be a Pizza Hut topping designer.
Today's expert on a stick is one Robert McChesney, a professor at the University of Illinois and the author of a book about media mergers. He's quoted in two different WP front-pagers and by the LAT. Although to be fair, if he weren't quoted there would hardly be any doubts raised in the dailies at all about the wonderful wonderfullitude of it all. He thinks the deal is bad for freedom of expression. The WP's media reporter Howard Kurtz also takes a crack at the threat the deal poses to independent journalism, creating as it does more financial relationships between reporters and institutions they might be covering. His column ends with the credit line: "Howard Kurtz appears on CNN's weekly media program."