What to watch in AT&T's first earnings since acquiring Time Warner

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Credit: Michael Nagle/Bloomberg

It's been a heated summer for M&A in the media space and AT&T will continue to answer questions on deal making when the telecom giant reports its first earnings on Tuesday since it closed its deal to buy Time Warner, now WarnerMedia.

Top of mind, of course, will be the Justice Department's appeal, filed on July 12, of last month's court ruling approving the more than $80 billion pact. AT&T will field questions regarding what the appeal means for the future of the business and what might happen if the original ruling is overturned.

While most expect the merger will stand in the end, the appeal creates la level of uncertainty around the future of deal-making in a marketplace where Walt Disney is looking to acquire most of Fox's assets and Comcast and 21st Century Fox are battling for British pay-TV company Sky.

But AT&T leadership will likely be guarded in its response. Don't expect for them to lend much more insight than what they previously said on the matter: "The court's decision could hardly have been more thorough, fact-based, and well-reasoned," David McAtee, AT&T general counsel, said in a statement about the appeal. "While the losing party in litigation always has the right to appeal if it wishes, we are surprised that the DOJ has chosen to do so under these circumstances. We are ready to defend the court's decision."

Wall Street will also be looking for commentary on progress of the integration, including clarity on the future of networks like HBO.

WarnerMedia CEO John Stankey received criticism for comments he made during a town hall meeting earlier in the month regarding his vision for the premium cable channel. According to a report in The New York Times, Stankey, an AT&T vet, is ultimately looking for HBO to be more competitive with streaming giants like Netflix. To do so, Stankey said HBO will need to create more hours of content and appeal to a broader consumer base. This philosophy is seen by some as a threat to HBO's success rate for high-caliber, award-winning content, and generated fear that the network could be on the path toward becoming a content mill.

AT&T could lend some clarity during its earnings call on Stankey's comments and what top brass expects from HBO and other networks like CNN and TBS.

AT&T missed analyst earnings and revenue expectations last quarter when it lost 187,000 traditional TV subscribers. But as it looks to become a modern media that company that delivers content directly to consumers, AT&T added 312,000 subscribers to its over-the-top service DirecTV Now in the first quarter.

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