USA TODAY International Edition
AT&T, Warner merger OK’d
Ruling paves way for landmark deal, could orchestrate viewing change
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.”