A federal judge handed AT&T a sweeping victory on Tuesday and approved its $85 billion acquisition of Time Warner, a deal that promises to reshape the media industry.
Hadas Gold and Brian Stelter of CNNMoney.com had the news:
After a six-week trial, Judge Richard Leon ruled that the government had failed to prove that the deal violates antitrust law, and ripped apart its case in his opinion.
Using unusually strong language, he discouraged the Justice Department from asking him to put the ruling on hold while it considers an appeal. He said such a stay would be “manifestly unjust” because it would have the effect of killing the acquisition
AT&T celebrated the ruling and vowed to close the deal by June 20 — meaning that HBO, CNN, Warner Bros. and Time Warner’s other brands will change hands next week. The deal will unite Time Warner’s TV shows and movies with AT&T’s enormous distribution system, including cell phone and satellite networks.
“This was a defining case for antitrust enforcement in the US,” former Justice Department antitrust attorney Ketan Jhaveri said. “It does seem to be a complete and total victory for AT&T.”
Marguerite Reardon of CNET reported that the deal is likely to lead to more media mergers:
The merger, which combines one of the largest communications network providers with a major player in the entertainment market, is poised to shake up the media world. It may immediately trigger another deal between Comcast and Fox, which already has an agreement to sell its entertainment assets to Walt Disney. The deals come at a time when traditional media and internet service providers see online giants like Google and Facebook as the key competitive threat.
For AT&T, the ruling marks a huge win in its bid to transform itself into a media powerhouse. In 2015 it purchased satellite TV provider DirecTV for nearly $49 billion.
AT&T applauded the court’s decision. The company said it plans to close the merger, which was announced a year and a half ago, on or before June 20.
“We are pleased that, after conducting a full and fair trial on the merits, the Court has categorically rejected the government’s lawsuit to block our merger with Time Warner,” David McAtee, AT&T’s general counsel, said in a statement.
Ted Johnson of Variety reported that Time Warner believes the Justice Department lawsuit was politically motivated:
Gary Ginsberg, Time Warner’s executive vice president, said in a statement that U.S. District Judge Richard Leon’s “resounding rejection of the government’s arguments is confirmation that this was a case that was baseless, political in its motivation and should never have been brought in the first place.”
Executives at both companies broach the idea that the merger was singled out for antitrust enforcement because of President Donald Trump’s animosity toward Time Warner unit CNN.
Before the trial started, AT&T CEO Randall Stephenson called Trump’s opposition to the merger and attacks on CNN the “elephant in the room” and that the lawsuit raised First Amendment issues. Trump opposed the transaction during the 2016 presidential campaign, and supported the DOJ’s lawsuit.