The US Department of Justice has informed AT&T that it must sell Turner Broadcasting, the group of channels that includes CNN, if it wants approval for its $84.5 billion acquisition of Time Warner, according to a New York Times report citing people briefed on the matter.
The proposed divestiture of Turner is just one of multiple demands being made by regulators, which are assessing antitrust concerns surrounding the AT&T-Time Warner deal, a separatereport from the Financial Times said. It is, however, the condition viewed as the most likely sticking point, since AT&T has opposed it in the past and argued the deal isn’t anti-competitive.
The other avenue AT&T could take to get the deal approved would be for it to sell its DirecTV division, according to the New York Times report. If the DOJ makes either demand official, AT&T and Time Warner would almost certainly take the matter to court, the Times said.
The reported demands by Trump’s DOJ come on the heels of repeated instances of the president calling CNN “fake news.” Trump also criticized the proposed acquisition near the end of his presidential campaign, saying that “deals like this destroy democracy.”
“As an example of the power structure I’m fighting, AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few,” Trump said in an October 22 speech.
Trump’s concerns echo those expressed by many critics of the proposed deal who think that too much consolidation in the media and telecom industries is ultimately bad for both. Still, antitrust experts have said that on a strictly legal basis, fighting the deal might be difficult for the DOJ.
Earlier on Wednesday, AT&T chief financial officer John Stephens hinted at the struggles it was facing with the DOJ, saying amid discussions that the timing of the deal closing was “now uncertain.”
These latest developments throws into question the timetable laid out by both companies in late October, when they the deal would be completed by the end of 2017.
Full Content: New York Times