AT&T, antitrust officials discuss shedding CNN

Sources differ on who suggested spinoff of network owner, but deal could be delayed

WASHINGTON» Justice Department officials told AT&T that its $85 billion bid to acquire Time Warner is unlikely to be approved without major changes, a move that is driving the two sides toward a highstakes legal battle over one of the biggest media deals in history.

The deal would transform the telecom company into a major media empire with control over CNN, HBO and Warner Bros. studios as well as satellite cable provider Direct TV. Antitrust officials want AT&T to either sell off the satellite business or Turner broadcasting, which includes CNN — conditions that AT&T is unlikely to agree to easily.

But three people briefed on the situation had conflicting accounts of the specifics. One of the people said Wednesday that the Justice Department, at a meeting in Washington this week, pressed AT&T to divest CNN, which has been criticized repeatedly by President Donald Trump. But the other two denied that happened, adding that it was in fact AT&T that had proposed the sale of the news network as a potential compromise. The three people spoke on the condition of anonymity to freely talk about the private discussions.

Conflicting news reports about the role of CNN in the talks prompted AT&T chief executive Randall Stephenson to release a statement Wednesday afternoon, saying he has “never offered to sell CNN and have no intention of doing so.”

Antitrust regulators have been examining the AT&T-Time Warner deal for more than a year, and any notion that it would be easily approved evaporated Wednesday as reports about the Monday meeting leaked.

Earlier Wednesday, AT&T’s chief financial officer said he is no longer confident that a deal will be completed this year.

The proposed tie-up is part of a push by cable and telephone companies to own the content that flows through their pipes. In 2011, Comcast, the nation’s largest cable provider, became the first to swing a massive deal of this kind when it acquired NBC Universal.

AT&T’s tie-up with Time Warner would give the telecom giant large control over a massive media ecosystem. The combined company could own HBO television shows, superhero films set in the DC Comics universe, including the forthcoming “Justice League,” and the Harry Potter franchise. It would also have a distribution network that includes AT&T’s wireless network, home internet platform and DirecTV.