Published: Wed, June 13, 2018
Business | By Tara Barton

AT&T-Time Warner merger to change media landscape

AT&T-Time Warner merger to change media landscape

That same day, Trump, then a candidate for president, pledged that his administration would block the deal.

Judy, the decision comes nearly two years after AT&T first announced its plan to buy Time Warner, and just one week before the companies face a deadline to complete the merger. Cable network owner Discovery Inc saw shares increase 3.2 percent while mobile providers, Sprint Corp and T-Mobile US Inc, which are waiting for a government approval of their own, also saw a bump following the decision. Instead, a rush to consolidate is likely.

A combination photo shows the Time Warner shares price at the New York Stock Exchange and AT&T logo in New York, NY, U.S., on November 15, 2017 and on October 23, 2016 respectively.

Following a federal judge's approval of AT&T's $85 billion acquisition of Time Warner on Tuesday, Time Warner's executive vice president Gary Ginsberg came out swinging against the Department of Justice, calling its lawsuit to block the deal on antitrust grounds "meritless". Disney has a deal to buy the bulk of Fox, but Comcast is now expected to make a counterbid, especially with the favorable ruling for AT&T.

"The government here has taken its best shot to oppose this merger", Leon said, speaking to a packed courtroom in an unusual session weeks after the trial ended.

U.S. District Judge Richard Leon on Tuesday rejected the Justice Department's request for an order blocking the Time Warner acquisition, saying the government failed to make its case that the combination would lead to higher prices for pay-TV subscribers.

Gary Ginsberg, 's executive vice president, said in a statement that U.S. District Judge Richard Leon's "resounding rejection of the government's arguments is confirmation that this was a case that was baseless, political in its motivation and should never have been brought in the first place". Netflix, which had a market value of around $20.6 billion in 2014, is now worth $158.5 billion, surpassing the market value of all the legacy media companies.

Halford, from OC&C added, "All I know is that this will be a blockbuster summer for media mergers!"

It will bring together AT&T's significant wireless, satellite television and internet business with Time Warner's media properties, which include HBO and CNN.

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The Justice Department is not likely to be put off by the loss, said Amy Ray of the law firm Cadwalader, Wickersham & Taft LLP, noting it had prevailed in stopping other mergers between rivals. "The decision to approve the AT&T/Time Warner merger further entrenches AT&T as a media gatekeeper that harms the public interest and opens the door for more media consolidation in the future".

"Common sense tells you that this degree of concentrated power isn't right", wrote Zephyr Teachout, a candidate for attorney general of NY, wrote immediately following the judge's ruling.

Before the trial started, AT&T lawyers said the Time Warner deal may have been singled out for government enforcement but the judge rejected their bid to force the disclosure of White House communications that might have shed light on the matter.

The Writers Guild of America West called Leon's decision a "blow to consumers, content creators and competition".

The mega-merger is a high-stakes bet by AT&T Inc. on the synergy between companies that produce news and entertainment and those that funnel it to consumers - who spend more time watching video on phones and tablets and less time on traditional live TV on a big screen.

Rep. Jerrold Nadler of NY, the ranking Democrat on the House Judiciary Committee, said he worries that the ruling will drastically alter the telecommunications industry.

The ruling is a stinging defeat for the Justice Department.

Sprint tried to acquire T-Mobile in 2014, but dropped its bid after regulatory pushback. Comcast and Verizon are also jockeying for position in the new landscape. Post-merger, AT&T rivals like Charter Communications and Cox, which now pay Time Warner for its channels, would suddenly also become AT&T's customers.

That leverage would allow AT&T to raise prices for Time Warner content, with those costs being passed on to consumers, according to the Justice Department.

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