AT&T’s acquisition of Time Warner has hit a serious snag as negotiations between the companies and the Department of Justice have turned so contentious that now both sides are arguing publicly over what the dispute is even about.
Brian Stelter of CNNMoney.com had the news:
Both sides agree that there was a pivotal meeting on Monday between AT&T CEO Randall Stephenson and DOJ’s antitrust chief Makan Delrahim.
The two men discussed divestitures that might satisfy the government’s concerns.
Sources on both sides disagree about who brought up what.
Some sources say AT&T floated the possibility of selling CNN or other assets.
Other sources say the DOJ indicated that a divestiture of CNN would not be sufficient to make sure the deal doesn’t hurt consumers.
Drastic options were discussed, like the sale of the entire Turner division, which includes CNN, TNT, TBS, and other channels. Another option: selling DirecTV, the satellite broadcaster that AT&T bought two years ago.
But AT&T is said to be reluctant to sell assets, especially Turner, which represents a significant portion of Time Warner’s profits.
Tony Romm of Recode reports that some Democrats want the deal blocked:
Normally, Democrats would be celebrating. After all, some have urged the government for months to toss the companies’ merger plans. But the Justice Department’s efforts are shrouded in controversy because of Trump. His repeated, public threats against AT&T loom over his administration’s regulatory review — an investigation that’s supposed to be independent.
And DOJ’s focus on CNN, in particular, left some on Capitol Hill wondering if regulators’ skepticism is real — or the stuff of partisan politics.
Sen. Al Franken, for one, told Recode in a statement Wednesday that AT&T’s bid to buy Time Warner would create a “massive corporation that would wield entirely way too much power, likely resulting in even higher prices, even fewer choices, and potentially worse service for consumers.” Much as before, he stressed they should be stopped.
But Franken wasn’t celebrating reports that DOJ had set its sights on CNN. He said he was “deeply concerned” that AT&T might have to spin off the company in order to proceed with the merger, “given the president’s repeated public complaints about CNN’s coverage of him.”
Jessica Toonkel and David Shepardson of Reuters report that AT&T now believes the deal’s completion is uncertain:
Until recently the vertical deal – which in theory should not reduce competition among the two companies’ direct rivals – was considered by antitrust experts as likely to be approved with no major concessions.
But regulators’ desire for asset sales will complicate negotiations. AT&T said earlier on Wednesday it was now uncertain when the deal would be completed. It had previously said the acquisition would close by the end of this year.
The discussion of a potential sale of CNN has politicized the situation. Trump has repeatedly tangled with CNN, calling the network’s coverage “fake news.”
