Should The DOJ Be Consistent With Media Deals?

It seems strange that suddenly there is an effort to stop mass-media consolidation -- which comes after many big media/
communications/TV network deals. Don't count on consistency when it comes to media mergers.

The Department of Justice has filed a lawsuit to stop the AT&T/Time Warner deal in an effort to halt industry consolidation. It wants AT&T to sell off businesses or the deal will be stopped.

For many, vertical consolidation is the issue. But should it be?

Some of the same arguments the DOJ is making could have been made when Comcast bid for NBCUniversal a few years back. Primarily, that Comcast, as the biggest cable operator, could score higher prices from its pay TV competitors to carry a dozen TV networks owned by NBCUniversal.

OK, so maybe things have changed from a few years ago — at least when it comes to who runs the DOJ.

Still, wouldn't the DOJ want to be consistent with current deals — especially considering so-called “horizontal” mergers? In this regard, that means the DOJ should have a major issue with two large TV station groups combining: Sinclair Broadcast Group’s potential merger with Tribune Media.



For many, the DOJ should have fewer competition problems with the AT&T/Time Warner “vertical” merger — a phone communications/satellite pay TV provider company (AT&T) with a big cable TV network group and movie studio (Time Warner).  

But as numerous analysts have surmised, the issue is politics.

President Donald Trump has openly criticized Time Warner’s CNN for more than a year now. But neither Trump nor the DOJ have said or hinted anything negative about Sinclair. TV analysts call Sinclair an obvious conservative-leaning, pro-Trump TV group, especially when it comes to its newscasts.

In addition,, senior Trump advisor Jared Kushner told people last year that the Trump presidential campaign had an editorial “deal” with Sinclair regarding news coverage.

Now throw in new digital media. Are there growing digital media competitors — Google, Facebook, etc. — blunting the DOJ’s anti-competitive argument?

Craig Moffett, senior media analyst at MoffettNathanson Research, speaking on CNBC on Monday, said AT&T would be in control of selling the carriage of Turner networks to Google’s new live, linear digital TV platform, YouTube TV.

“Would Randall Stephenson [CEO of] AT&T have, in theory, the ability to raise the price to disable Google as a competitor? Of course they could,” says Moffett. “It is not fair to say there are simply no risks to vertical foreclosure.”

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