Published: Wed, June 13, 2018
Money | By Armando Alvarado

AT&T-Time Warner Decision: Either Way, Media Is Ailing

AT&T-Time Warner Decision: Either Way, Media Is Ailing

The media world just got a little smaller.

The ruling could also prompt a cascade of pay TV companies buying television and movie makers, with Comcast Corp's bid for some Twenty-First Century Fox Inc assets potentially the first out of the gate.

For AT&T, the ruling marks a huge win in its bid to transform itself into a media powerhouse. Comcast has already made an offer for Sky, the United Kingdom satellite TV business.

"We think the evidence throughout the trial was quite clear and we're very pleased that the court saw it the same way", said Daniel Petrocelli, AT&T's lawyer.

The decision by Judge Richard Leon is a setback for Makan Delrahim, President Trump appointee to the top spot in the Justice Department's antitrust division, challenging his view of antitrust laws in the digital era.

The ruling is a stinging defeat for the Justice Department.

"We are disappointed with the Court's decision today", a spokesperson for the agency said in a statement. "We will closely review the Court's opinion and consider next steps in light of our commitment to preserving competition for the benefit of American consumers". They have been increasingly calling for the government to break up Silicon Valley giants like Google, Facebook and Amazon and to prevent greater consolidation in health care, media, transportation and agriculture.

AT&T's wooing of Time Warner has been politically complicated from the outset. Time Warner shares are up about 5% at $100.91.

Nintendo seemingly confirms rumors of Fortnite on Switch
We should hear more information about Fortnite's future during Nintendo's E3 livestream on Tuesday, June 12th, at 9:00 AM PT. If you're intrigued to find out what the wizards have in-store for E3 2018 and what you can expect to see, read on.

The government's case hinged on an economic model produced by Carl Shapiro, an economist at the University of California at Berkeley, who predicted an annual price increase to consumers of at least $285 million.

AT&T and Time Warner dismissed the government's concerns. Or it could hurt Netflix and other content producers by locking them out of AT&T's multi-channel distribution network. AT&T, the nation's second-largest wireless service provider by subscribers, is looking for a new area of growth. The merged companies could withhold programming from competitors, pressuring consumers to switch to AT&T services.

A federal judge on Tuesday gave a ringing endorsement to AT&T Inc's planned acquisition of Time Warner Inc without any conditions, opening the door for companies such as Comcast Corp and Verizon Communications Inc to pursue deals to buy creators of media content. Looming in the background of the deal has been Trump's long-running feud with Time Warner's CNN, which he has often derided as "failing" and a purveyor of "fake news".

Announced in October 2016, the deal was quickly denounced by Donald Trump, who as a candidate and later as president has been critical of Time Warner's CNN and its coverage.

Democrats on Capitol Hill have raised questions about the Justice Department's motivations and the White House's influence in deciding to take the case to court. The Department of Justice had sued AT&T to block the merger. Sessions did not comply with the request.

But AT&T rejected that idea, stating in a court filing that, "Divestitures here would destroy the very consumer value this merger is created to unlock".

AT&T, meanwhile, saw its share price fall 2.1 percent, to $33.63, after the ruling was revealed.

Like this: