AT&T wins court approval to buy Time Warner for $85B


CNN host Chris Cuomo claimed President Trump's opposition to the recently approved AT&T-Time Warner merger was about "reinforcing the power of" the president, not checking the power of corporations.

An array of public interest and labor groups - many of them far from supporters of Trump - nevertheless supported the Justice Department's attempt to block the deal. For consumers, that may mean higher prices for services they buy from AT&T and Time Warner now, all in the name of competition.

However, in Verizon's most recent quarterly earnings call, executives said they would rather sit out the current consolidation, and instead build out its content offerings through partnerships with independent media companies. The deal will unite Time Warner's TV shows and movies with AT&T's enormous distribution system, including cell phone and satellite networks.

AT&T won approval from a U.S. court on Tuesday to buy Time Warner for $85 billion, without conditions, allowing AT&T to compete with Internet companies that dominate digital advertising and providing new sources of revenue. The sheer scale of the deal is what led the Justice Department to file an antitrust lawsuit to try to prevent the merger.

Judge Richard Leon isn't wrong that Silicon Valley giants like Netflix, Apple and pose real threats to media companies.

In any case, the judge's decision - which could block, allow or approve the merger with restrictions - is unlikely to be the final word.

But after a six-week trial, US District Judge Richard Leon said the government had failed to meet its burden of proof that the merger would harm consumers.

Rival cable company Comcast is now likely to go ahead with its planned attempt to woo Fox away from Walt Disney Co, which said it would acquire most assets of the media company for around $50 billion a year ago.

The Department of Justice could decide to appeal the verdict.

The merger, which is set to be completed June 21, would create a massive new media company, combining AT&T's cable TV, satellite TV, and cellular telephone networks with the media giant that owns the Warner Bros. movie studio as well as the cable TV channels CNN and HBO.

The White House did not immediately respond to a request for comment.

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Judge approves AT&T-Time Warner merger

In a blunt statement after the ruling was issued, Time Warner pointed the finger at President Trump, implying that he influenced the DOJ's decision to bring the case.

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

Or Leon could reject the merger outright, accepting the government's contention that it would hurt pay-TV consumers and competition in the industry. Mergers of companies that compete against each other are often blocked because they reduce the number of competitors in a given market.

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.

Ryan Radia, a research fellow at the Competitive Enterprise Institute, a right-of-center think tank in Washington, praised the ruling.

The ruling is a stinging defeat for the Justice Department. Pressing in the wings are potential big-billions deals involving 21st Century Fox and Disney, Verizon and CBS, T-Mobile and Sprint.

Time Warner's stock rose almost 5 percent in after-market trading.

Judge Leon's decision comes more than 18 months after AT&T announced in 2016 its plans to buy Time Warner in a transaction then valued at about $85bn.

During the trial, the judge heard from dozens of witnesses, including AT&T CEO Randall Stephenson and Time Warner CEO Jeffrey Bewkes.

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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