Some investors may be saying, hold up—why does T-Mobile even want this thing? It's a fair question. Sprint isn't exactly a hot commodity, what with its $33 billion of net debt (same as its equity value) and cash-burning parties. Meanwhile, T-Mobile is on top of its game, proudly waving its magenta flag. But there's a very simple answer: Sprint subscribers are low-hanging fruit for T-Mobile.
Or, as she puts it further down in her piece: T-Mobile's proposed "all-stock deal with Sprint to gain 40 million subscribers in one shot looks cheap."
As Richard Morgan notes in this morning's New York Post, "In 2014, Sprint and Japanese parent SoftBank called off takeover talks with T-Mobile and German parent Deutsche Telekom after sensing US regulators would quash any deal that reduced the field from four to three key players. Their motivation then, as now, was to create a stronger competitor to industry leader Verizon, with a 35.7 percent share, and AT&T, with 33.1 percent." But that was then—the Obama years—and this is now. The Trump administration is not expected to stand in the way of a deal.
Who would run this thing?
The rock star, naturally. "The companies have agreed ... that John Legere, T-Mobile's outspoken chief executive, would run the combined company should there be a deal," reports Reuters' Liana B. Baker, citing "a person familiar with the matter." Calling Legere "outspoken" might be an understatement. Not only does he deal himself into T-Mobile's marketing ...
... but he hasn't shied away from feuding with his industy peers, including Sprint CEO Marcelo Claure on Twitter in January:
many lives were endangered & it was a criminal act. It's actually not funny.— John Legere (@JohnLegere) January 15, 2017
Who stands to lose if this deal goes through?
Back in May, when rumors of a T-Mobile-Sprint deal were gaining early traction, Bill Baer, a former assistant attorney general for the antitrust division of the Department of Justice, and Tom Wheeler, former chairman of the FCC, stated the obvious in a CNBC post: "A merger like this would mean less competition in the wireless industry—and higher prices for consumers."
Also obviously set to lose: Madison Avenue. According to analytics firm iSpot.tv, which tracks TV ad attention and conversion data across millions of smart TVs and maintains running estimates of overall brand outlay, T-Mobile has spent $403 million on national TV ads year-to-date while Sprint has spent $273 million, making them the second- and third-place spenders behind Verizon ($487 million). And, again, that's just TV ad spending.
Simon Dumenco, aka Media Guy, is an Ad Age editor-at-large. You can follow him on Twitter @simondumenco.