Commentary

Justice Department Wants AT&T To Do Media Shuffle

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.

2 comments about "Justice Department Wants AT&T To Do Media Shuffle".
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  1. Ed Papazian from Media Dynamics Inc, November 9, 2017 at 9:43 a.m.

    This looks like a deal killer to me as one of the not much discussed motivations for AT&T in this deal----if my suspicions are accurate--- is to get its hands on "linear TV" in-program GRPs, via the Turner cable channels and convert many of these into high CPM "addressable TV" GRPs.

  2. Paula Lynn from Who Else Unlimited, November 9, 2017 at 10:32 p.m.

    Nothing good is going to come from any of it.

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