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Here’s ’30 Rock’ on What a Vertical Merger Is, In Honor of AT&T-Time Warner (Video)

Liz Lemon and Jack Donaghy are still teaching us after all these years

Good god, Lemon, you don’t know about vertical integration? Now that AT&T and Time Warner have court approval to complete a $85.4 billion merger, let’s refresh you on the how vertical integration works with help from “30 Rock.”

Liz Lemon and Jack Donaghy, the “30 Rock” leads played by Tina Fey and Alec Baldwin, have an effective and hilarious description of vertical integration, an arrangement in which one company combines two or more stages of production normally operated by multiple companies.

The AT&T-Time Warner merger is an example of vertical integration because AT&T is a firehose of distribution thanks to its cellular and cable networks and those customers. Time Warner, meanwhile, owns content-generating brands, publications and other intellectual property.

That sounds dry, right? That’s why we needed a funny example. Here’s an analogy for how two companies might complement each other, via “30 Rock”:

Jack: “Imagine that your favorite corn chip manufacturer also owned the number one diarrhea medication.”

Liz: “That’s be great, because then they could put a little sample of the medicine in each bag.”

Jack: “Keep thinking.”

Liz: “Except then, they might be tempted to make the corn chips give you –”

Jack: “Vertical integration.”

Liz: “Wow, that should not be allowed to happen.”

And there you have it. Shout out to @AdamPasick for resurfacing this gem.