Trump’s CNN attacks may hobble legal case to block AT&T-Time Warner deal

The AT&T logo is seen on a store in Golden, Colorado
The AT&T logo is seen on a store in Golden, Colorado United States July 25, 2017. REUTERS/Rick Wilking

November 10, 2017

By David Shepardson and Jan Wolfe

WASHINGTON/NEW YORK (Reuters) – President Donald Trump’s broadsides against cable network CNN may complicate the U.S. government’s legal case if it decides to block AT&T’s deal to buy media company Time Warner, according to legal experts.

Trump’s repeated claims that CNN produces “fake news” and other criticisms of the network could hurt legitimate legal arguments the Department of Justice may use to show the deal gives the company too much power over media rivals and is bad for consumers.

“His comments have soiled the process,” said John Kwoka, an economics professor at Northeastern University. “If I were AT&T’s lawyers I would certainly introduce them into the evidentiary record as meddling with what is really a law enforcement process.”

The fate of AT&T Inc’s <T.N> $85.4 billion deal to buy Time Warner Inc <TWX.N>, hatched in October 2016, looks set to end up in court as the two sides have so far failed to agree on what conditions AT&T needs to meet in order to gain antitrust approval.

Justice Department staff have recommended that AT&T sell either its DirecTV unit or Time Warner Inc’s <TWX.N> Turner Broadcasting unit, which includes news company CNN, a government official told Reuters on Thursday, on the grounds that a combined company would raise costs for rival entertainment distributors and stifle innovation.

AT&T chief executive Randall Stephenson said on Thursday he would not sell CNN to win antitrust approval and would fight the government in court if the two sides could not reach an agreement.

“If we feel like litigation is a better outcome then we will litigate,” Stephenson told the New York Times DealBook conference on Thursday. He said the company had been ready to go to court the day the deal was announced in October 2016.

TRAVEL BAN COULD BE PRECEDENT

The deal took on broader political significance soon after it was announced when Trump attacked it on the campaign trail last year, vowing that as president his Justice Department would block it. He has not commented on the transaction since taking office in January.

Trump’s aggressive campaign comments have harmed legal arguments of his administration before.

Earlier this year, an appeals court refused to reinstate a ban on travelers from a group of Muslim-majority nations on the grounds that it illegally targeted people of one religion.

Explaining the decision, the chief judge cited a statement on Trump’s campaign website calling for a “total and complete shutdown of Muslims entering the United States.” The U.S. Supreme Court later partially reinstated the travel ban.

OVER BY APRIL

Stephenson has rejected the Justice Department’s arguments against the deal, saying it was a classic “vertical” merger that removed no competitors from any market and denied the company would be too powerful.

He said a combined AT&T and Time Warner would create a data and advertising company competing against the newest and most disruptive entrants into the media sector: Amazon.com Inc <AMZN.O>, Facebook Inc <FB.O>, Netflix Inc <NFLX.O> and Alphabet Inc’s <GOOGL.O> Google, not other wireless phone companies.

Stephenson told the conference he has no reason to think Trump would be a factor in the deal’s approval and said he hoped the matter would be settled well before the April 22, 2018 deadline when parties can walk away from a deal.

The head of the Justice Department’s antitrust division, Makan Delrahim, said in a statement late on Thursday that he has “never been instructed by the White House” on the AT&T deal.

AT&T told the Justice Department on Monday that it believed it had complied with all legal requirements for the deal to be cleared, a person briefed on the matter said. That sets a deadline for the government to sue if it wants to block the merger. Officials said that detail could be as early Nov. 27.

Shares of Time Warner closed down 1.6 percent at $87.05. AT&T shares rose 1.6 percent to $34.00.

(Reporting by David Shepardson and Jan Wolfe; Additional reporting by Anjali Athavaley, Subrat Patnaik and Aishwarya Venugopal; Writing by Anna Driver; Editing by Bill Rigby and Chris Sanders)

  • Jesse

    Not sure why they even list AT&T’s stock price. It’s been somewhere around $35 for the last 20 years. You don’t own it for anything besides the dividend.

  • Indiana Mike

    Notice how the Bolsheviks are denying the Presidents Legally and Constitutionally granted Powers of Office? This is Sedition by definition….We are in an outright Bolshevik coup

  • Localdude

    …and Obamas comments, may have hobbled – local police from doing their jobs and many, many court cases to be tried – without opinions from Obama and his race baiting. anyways, I am so heartbroken that ATT may suffer its inability to gobble up all competition….by any tweets from our president or – whatever advantage they get from it either, they have lawyers who will use ANY advantage. Go Trump. The DOJ has its own agenda, just a donation to whoever’s wife’s political campaign and the case goes away. I am so heartbroken that CNN stocks wont soar if the deal goes threw…or doesn’t. lol, it will be done soon anyways…CNN is run by fools. ATT was broken up once, it will be again, the ‘game’ continues….hey, whatever happened to ala cart cable and satellite we were promised??….that’s what I’d like to know. WHY do I have a sports channel charge still?? NFL scam. ATT is still the same overcharge for shell game ‘packages’ that in the end are all the same – and without competition. These greedy media types will seal their own greedy fate eventually. Same with those at DOJ who no longer work for the people – but work for their establishment handlers and donors. This is just another Reuters ‘cut and paste’ blather story about nothing (except to ‘dog’ Trump).

  • JJake Spitz

    Can AT&T be any worse than those Time Warner liberal liars. That whole media needs to be cleansed starting with CNN.

  • Ipickedaside

    Had direct tv for years I now use PSvue. It’s about half the price. But I’ve come to the conclusion that tv has just become a left wing propaganda machine. Pushing all things I don’t personally believe in. I wanna see the shows I grew up on, but know one plays them. It does not fit their narrative. Or it’s to white or whatever I don’t know. I’ve come to realize that I’ve got a sewer pipe going out into the street and a sewer pipe that I pay 65.00 a month to pump crap back at me thru my tv. I am about done with it.

  • Sergeant_rock

    Well DUH…. They are Democrat run and the only thing Democrats know how to do is raise taxes and rates and spend OUR money…

  • Roscoe

    Since AT&T acquired Direct TV I haven’t had the same bill twice and it is always going up. My wife has to explain that Dish is only a phone call away. We have had Direct TV almost from the time it was available and it was never a problem over all of those years till AT&T bought it and now it is like a monopolistic cable company or the old telephone monopoly. Take what we give you because we know best what you need and you will pay for packages of stuff you don’t want to get the few channels that you do.

    • Don jon

      I will not use any dish provided tv both suck for three years I have uverse tv but att is trying to run people off this system to their dtv because there is low overhead on a dish where uverse is a telephone line that they hate servicing when there is a problem a rep says if you had dtv you would not have this problem, they told me that once too many times I sent them all my boxes and said good bye if you treated me right you wouldn’t have this problem now I save 180$ a month

      • Roscoe

        If I didn’t live in the sticks and lived back in the big city I would just get high speed internet and a flash stick or smart TV and work around the rest and watch what I wanted. Out on my 80 acres in the sticks my only real high speed option is Hugh’s net at 25 mbs. Fast internet in town on cable is 12 mbs. Hugh’s net is not cheap.

  • Generalmayhem

    Watch closely. All these mergers over the last few years has led to a small number of owners from whom all our information now comes. Typically, these owners are liberal unhinged bitter humans so what we have access to increasingly will be what they want us to know and not what we need to know.

    • shafawn

      Small number of pedophile and sexually immoral globalists and I swear even in the last month the new television shows are so disgusting I can’t even finish watching the first episode of any new series. Full of either revisionist history, LGBT propaganda or attacks against Christianity. I’m so completely disgusted that I’m canceling directv in Feb when the contract is finished.

      • mnstar

        This is not Time Warner Cable, this is a totally different company. They split years ago.

      • Jesse

        Its only 20 bucks a month early cancel fee. Cancel today. Pay 60 to save 3 months worth of service cost and be done with the filth.