After Media Detour, AT&T Confronts Old Problems

“It would have been an amazing merger,” said David Barden, a senior research analyst at Bank of America. “It would have kind of perpetuated the AT&T juggernaut of growth through acquisition — not through organic — but it failed.”

Mr. Stephenson then looked to the attractive profit margins found in media and entertainment. In 2014, he announced a deal for DirecTV, a transaction that he promised would “redefine the industry.”

But AT&T bought into the pay-TV industry at its peak. Not long after it acquired the satellite service, consumers left in droves.

“One thing they didn’t — they could not have anticipated, was that 2014 was the last year linear video would grow,” Mr. Barden, referring to the cable TV business. “Because who was out there in the wings? This little company called Netflix.” Customers began to cut their cords and cable subscriptions began their descent.

Then came Time Warner. Numerous analysts pointed out that owning a company that makes money by distributing shows and films as widely as possible wouldn’t give AT&T any advantage. In other words, it would still have to license HBO and CNN to rivals like Verizon’s television service, or to cable giants like Comcast. AT&T would have a hard time justifying keeping the content for itself.

The Justice Department sued AT&T to block the deal, but it lost its case in court.

Makan Delrahim, the former Justice Department antitrust chief who oversaw the suit, said in an interview that AT&T’s rampant deal making was a “classic case” of corporate misbehaving. The company “did a series of mergers and acquisitions and really were not rational for their business execution,” he said, “T-Mobile, DirecTV and Time Warner. And this is the result.”

Mr. Whitacre, the founding chief executive of the modern AT&T, offered another view.

“The deals we made while I was chairman — which was a long time — was acquiring the businesses that we were familiar with, the businesses we were in,” he said in an interview. “And when I left, that changed.”

Mr. Whitacre, who is still an AT&T shareholder, said he liked the Discovery deal, getting the company back to “where we came from, if you would.”