AT&T, Warner merger OK’d

Rul­ing paves way for land­mark deal, could or­ches­trate view­ing change

USA TODAY International Edition - - FRONT PAGE - Ed­ward C. Baig

A fed­eral judge ruled in fa­vor of AT&T’s $85 bil­lion ac­qui­si­tion of Time Warner on Tues­day in a de­ci­sion that is likely to raise the cur­tain on mega-merg­ers among the na­tion’s en­ter­tain­ment com­pa­nies.

U.S. Dis­trict Judge Richard Leon did not im­pose any con­di­tions that would have prompted AT&T to scut­tle the deal, fur­ther em­bold­en­ing legacy Hol­ly­wood and telecom­mu­ni­ca­tions com­pa­nies to pair up in an ef­fort to counter deep-pock­eted new tech ri­vals such as Net­flix, Ama­zon, Ap­ple and Google.

Even be­fore the de­ci­sion, Com­cast said it was prepared to bid for 21st Cen­tury Fox’s as­sets, sig­nal­ing a price war with Dis­ney, which agreed to pay $52 bil­lion for the stu­dios that would help Dis­ney of­fer Net­flix al­ter­na­tives.

Tues­day’s rul­ing is a piv­otal chap­ter in a 20-month saga that be­gan in Oct. 2016 when the largest U.S. telecom­mu­ni­ca­tions com­pany first reached an agree­ment to buy Time Warner in a grab for TV and film con­tent that would di­ver­sify its mam­moth but ma­ture In­ter­net ac­cess busi­ness.

Time Warner is a hang­out for DC Comics’ su­per­heroes, as well as CNN and HBO, the pre­mium net­work where “Game of Thrones” re­sides,

and TNT, which just aired some of the NBA play­offs. AT&T owns pay-TV provider DirecTV along­side its ex­ten­sive land­line, wire­less and In­ter­net ac­cess busi­nesses.

AT&T ar­gued that a big­ger com­pany would ben­e­fit con­sumers be­cause a stronger com­pany would al­low it to of­fer more new ser­vices.

“In par­tic­u­lar we would ex­pect ag­gres­sive bundling of HBO, CNN, and other pro­pri­etary sports con­tent (NBA, NCAA, MLB) from Time Warner into the AT&T net­work as a key in­cen­tive for cur­rent and new AT&T wire­less cus­tomers,” wrote Daniel Ives, head of tech­nol­ogy re­search at GBH In­sights, in a note to in­vestors.

The U.S. gov­ern­ment sued to block the trans­ac­tion this past Novem­ber, ar­gu­ing the larger com­pany would have too much power and that in­di­vid­u­als’ TV tab would rise as a re­sult.

Jus­tice Depart­ment as­sis­tant at­tor­ney gen­eral Makan Del­rahim said the agency plans to re­view the opinion and “con­sider next steps in light of our com­mit­ment to pre­serv­ing com­pe­ti­tion for the ben­e­fit of Amer­i­can con­sumers.”

AT&T will have ac­cess to HBO’s “Game of Thrones.” WARNER BROS/HBO

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