Saturday, November 27, 2021

Judge Rules For Merger Of AT&T And Time Warner

AT&T has won the right to buy Time Warner and its deep reservoir of programming for $85 billion. They got ruling on Tuesday.

After about 2 years of debate and a six-week trial, Judge Richard Leon has given the regulatory green light to one of the biggest media mergers in recent years.

The judge left the deal open-ended, with no restrictions.

President Trump’s Justice Department had pushed back hard against the deal — claiming it would give AT&T too much leverage, which would result in consumers facing increases in their pay-TV bills. The loss is a black eye for the Justice Department.

Some thought Trump had pressed for the lawsuit because of his animus toward Time Warner’s CNN.

With the megamerger expected to close in a matter of weeks, AT&T will now control DirecTV, the country’s largest pay-TV distributor, the second-largest cellular network and Time Warner’s popular programming — with CNN, HBO, TBS, TNT and Warner Bros. Pictures.

AT&T paid Trump lawyer Michael Cohen $50,000 a month for a year to understand the president’s thinking and to help get the October 2016 merger cleared.

Justice Department antitrust chief Makan Delrahim, speaking this morning at the Open Markets Institute, said people were throwing bricks at him for bringing this suit even though he was saving consumers from higher cable bills, a source at the event said.

The Justice Department has not brought a suit seeking to stop a vertical merger — whereby companies operating in different spaces combine — since 1979.

AT&T’s court victory still was never assured.

The Justice Department, mostly under President Obama, has won nine of the last 10 lawsuits it has filed to stop mergers, records show. And the one loss was a debatable split decision.

While a stinging loss, the Justice Department could still stop this merger. It is expected to appeal and ask for a stay — a delay that could stop the deal from closing for four to six months while an appellate court ponders a decision, legal experts said.

And that could be enough to rock the deal off its foundation, sources said, as the AT&T merger agreement expires on June 21 and Time Warner could ask for more money — or seek a different suitor, sources said.

In the last seven antitrust appeals in merger cases (mostly Federal Trade Commission suits), the government has won significant-enough stays to delay the underlying merger three times, according to a recent Bank of America analysis.

If this merger stands, it would have a big impact on the way consumers watch media, Wharton professor Herbert Hovenkamp — considered the dean of antitrust law — told The Post.

“It would mean more digital companies would attempt vertical mergers and that the industry would become more siloed.”

Hovenkamp believes distributors will likely acquire content that can only be seen over their devices, forcing consumers to subscribe to multiple services to watch favorite programming.

“My instinct is the people who will get hurt by this decision are older people who use cable television as their primary source,” Hovenkamp said.

Comcast is preparing to make a rival bid for Twenty-First Century Fox in a similar deal as early as tomorrow.

CVS Health, which has a pending $68 billion deal to buy Aetna, and Cigna, which has a $54 billion deal to buy Express Scripts, are likely relieved as they, too, are seeking clearance for controversial vertical mergers.



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