AT&T ready for legal fight
CEO says telecom giant is prepared to litigate with U.S. over Time Warner deal.
AT&T is gearing up for a potential legal battle with the government over the company’s planned takeover of Time Warner, said Randall Stephenson, chief executive of the telecommunications giant.
Stephenson, speaking at the New York Times’ DealBook Conference in New York City on Thursday, also said AT&T has no intention of selling CNN as part of the mega-deal. His comments came just one day after news broke that the U.S. Justice Department is pressuring AT&T to sell CNN as a requirement for the proposed $85-billion deal to receive federal approval.
“Since the day we’ve announced this, we’ve been preparing to litigate this deal, and we have been working very diligently on a litigation strategy and a litigation plan,” Stephenson said.
“If we get to a place, we’ll have to ask ourselves: Is a negotiated settlement a better or worse outcome than if we litigate? If we feel like litigation is a better outcome, then we will litigate.”
On reports that the Justice Department wants AT&T to divest Time Warner’s Turner Broadcasting unit — which includes CNN, Cartoon Network, TBS, TNT and Turner Classic Movies — Stephenson said: “I have never been told that the price of getting the deal done was selling CNN. Period. And likewise, I have never offered to sell CNN.
“I don’t even know who in the DOJ is saying these things. I have never offered to sell CNN.”
Stephenson declined to elaborate on AT&T’s discussions with the government. The company is believed to be facing a choice of selling Turner Broadcasting or divesting its satellite television unit, DirecTV. But such a choice most likely would undermine the entire point of the deal, which was to combine content, wireless service and TV distribution.
“What gets discussed inside that room is highly privileged, and I cannot go there,” he said.
But Stephenson defended the deal against its critics, including President Trump, who has publicly criticized CNN for its coverage of his administration and has repeatedly called the network “fake news.”
“This is a classic vertical merger. There are no overlaps of competition; there are no competitors being taken out of this market,” Stephenson said.
The new roadblock over CNN could significantly delay or even upend AT&T’s planned takeover of Time Warner, which was first announced last year and had been expected to close by the end of this year.
On Wednesday, AT&T Chief Financial Officer John Stephens surprised investors when he revealed that the company was in talks with the Justice Department and that “the timing of the closing of the deal is now uncertain.”
AT&T and Time Warner now have an April 22 deadline for their merger agreement to close.
The Justice Department said in a statement Wednesday that it “is committed to carrying out its duties in accordance with the laws and the facts. Beyond that, the department does not comment on any pending investigation.”
AT&T CEO Randall Stephenson, shown in January 2016, said the company has no intention of selling CNN as part of its planned takeover of Time Warner.