Recent leaked reports suggest trouble for the proposed merger of AT&T and Time Warner, an $85 billion deal first announced over a year ago. Last Wednesday, government sources claimed the Department of Justice’s antitrust division was demanding that AT&T sell Turner Broadcasting channels, including CNN, as a condition for approving the deal — and that AT&T had refused, setting up a possible court challenge.
Why Mergers Like the AT&T-Time Warner Deal Should Go Through
Last Wednesday, government sources claimed the Department of Justice’s antitrust division was demanding that AT&T sell Turner Broadcasting channels, including CNN, as a condition for approving the AT&T-Time Warner deal — and that AT&T refused, setting up a possible court challenge. If the government does go to court, it’ll lose. While some large mergers have been scuttled in recent years, this one is different, principally because the parties occupy different rungs in the media industry supply chain. Time Warner is all about content, while AT&T is focused on distribution. Their combination is what antitrust experts refer to as a vertical merger. The merger review guidelines, which haven’t changed significantly since publication in 1984, list a dozen unlikely scenarios under which vertical mergers might be given extra scrutiny — none of which apply to the AT&T-Time Warner deal.