Not so fast, AT&T.
The U.S. Justice Department reportedly wants AT&T to sell off Time Warner’s Turner unit -- which includes cable TV networks, CNN, TBS and TNT -- should it complete its $85 billion deal. And perhaps even more.
Why? We don’t have a clear reason. One might speculate it’s all about antitrust issues or consolidation. If not, there’s a focus on a guy named Trump. You know, he has this thing about CNN.
The Justice Department may also want AT&T to possibly sell off its DirecTV unit. AT&T completed the $48.5 billion purchase of the big satellite pay TV provider in in 2015.
The Justice Department could sue to block the Time Warner merger -- not that it would win, according to many analysts. But havoc would ensue.
One would think “vertical” deals -- a phone/communications company buying a DirecTV or a Time Warner -- would then be OK.
Traditional media companies are focused on combating a “disruptive” TV-media industry -- one that has seen growing power by new digital media companies, including Google, Facebook, Netflix and Amazon.
Of course, we have to address the political issues -- what President Trump really wants is to pull the rug out from under CNN. Trump has whined for over a year about the Time Warner news channel, including when he was a presidential candidate.
Randall Stephenson, chairman/CEO of AT&T, put the kibosh on this fantasy. He stated: “Given DOJ's statement this afternoon, it's important to set the record straight. Throughout this process, I have never offered to sell CNN and have no intention of doing so."
The New York Times reported in July that White House advisers discussed using the AT&T/Time Warner merger as “a potential point of leverage over their adversary” -- with potential emphasis on CNN.
Such a move seems to be the opposite of what President Trump has done since taking office -- in a broader business sense. He has issued any number of executive orders to eliminate industry regulations of all kinds.
Conversely, many have been concerned over financial issues for AT&T -- that the company has taken on too much debt when it came to DirecTV’s purchase and now, a possible Time Warner deal.
Is AT&T looking at monopolistic tendencies here? Not really. Plenty of competition exists for traditional pay TV providers -- as well as new digital TV providers. AT&T isn’t looking to corner the market on movie/TV studio production or cable TV networks.
TV distribution/movie studio vertical questions? There is a precedent: Comcast Corp. and NBCUniversal have been around for some time now.
Perhaps one should go back to their regularly scheduled ongoing political TV reality show for answers -- or maybe, just for the entertainment.