AT&T, TIME WARNER ARE CLEAR FOR $85B MERGER

The $85 billion mega-merger of AT&T and Time Warner approved by a federal judge over the Trump administration’s objections could usher in a new wave of media consolidation.

U.S. District Judge Richard Leon green-lit the merger without adding major conditions to the deal. The Justice Department had sued to block the merger, arguing that it would hurt competition in cable and satellite TV and jack up costs to consumers for streaming TV and movies.

Now, the phone and pay-TV giant, which already owns DirectTV, can absorb the owner of CNN, HBO, the Warner Bros. movie studio, “Game of Thrones,” coveted sports programming and other “must-see” shows. The Justice Department could appeal the ruling, however.

AT&T’s acquisition of CNN’s owner, Time Warner, means that AT&T will control both the content and the “pipes” that deliver it, said Joshua Benton, director of the Nieman Journalism Lab at Harvard University.

“Unfortunately, this is going to lead to another round of big mergers,” Benton said. “I do think it is troubling that a group of companies are now both the producers and the distributors of a huge share of content that draws our attention. You want to make sure there’s a competitive landscape, and the fewer

companies there are competing, the harder it is to have that.”

Brett L. Sappington of the market research firm Parks Associates, said AT&T can now go “head to head with big players in the industry ... this could trigger a round of consolidation. Many companies will say ‘If we don’t partner up to find negotiating power in this current environment, we stand to lose out.’ ”

Boston College Law School professor Dan Lyons said, “This is really about acquiring content, getting the demographic information that allows them to compete against Netflix — they have detailed profiles about their customer preferences and needs. If AT&T can marry what they know about consumers with what Time Warner knows about content, they can compete on the playing field a little more competitively.”

Lyons predicted more mergers as companies try to find new ways to build their businesses.

“We’re going to see a lot more experimentation,” Lyons said, noting that Disney has been trying to acquire Fox and Comcast may now put in a bid for the company as early as today following yesterday’s ruling. Waiting in the wings are potential big-billions deals involving Verizon and CBS, T-Mobile and Sprint.

In his announcing his decision, Leon said the government failed to prove the merger would lead to higher prices and other harm to consumers. He rejected the notion of temporarily suspending the merger, which has a June 21 deadline, for a possible appeal by the government.

The ruling is a stinging defeat for the Justice Department. First floated in October 2016, the deal also brought fire from then-candidate Donald Trump, who promised to kill it “because it’s too much concentration of power in the hands of too few.”

Dallas-based AT&T is a wireless, broadband and satellite behemoth that also became the country’s biggest pay-TV provider with its purchase of DirecTV. It claims about 25 million of the 90 million or so U.S. households that are pay-TV customers.