AT&T-TIME WARNER MERGER GETS OK, SETS STAGE FOR MORE BIG DEALS

Judge clears AT&T’s takeover of Time Warner

A federal judge approved AT&T’s $85 billion purchase of Time Warner on Tuesday, handing the telecom giant a massive victory that could clip the ambitions of U.S. regulators seeking to block big corporate tie-ups.

The case — one of the most closely watched antitrust trials in decades — is viewed as a bellwether for other deals waiting in the wings. From Comcast’s bid for 21st Century Fox to CVS’ acquisition of Aetna, massive corporations increasingly have sought to expand their reach by buying up companies in different lines of business.

The judge’s decision, which is allowing AT&T to merge with Time Warner without conditions, shows the federal government may struggle to rein in such mergers.

Judge Richard Leon said that the Justice Department — whose antitrust chief, Makan Delrahim, brought the rare case — failed to provide sufficient proof that the deal would harm competition or consumers.

New York — Now that a federal judge has cleared AT&T’s $85 billion takeover of Time Warner, other companies are likely to rush to consolidate.

Tuesday’s ruling signaled that federal regulators will have a hard time stopping companies from getting bigger by gobbling up rivals and the content they own. Even if a company doesn’t need to get bigger right away, it might need to do so to prevent a competitor from doing so.

For starters, expect Comcast to make a bid for Fox’s entertainment business as early as today.

These mega deals — some in the works, some still to come — will transform the media landscape and change how people consume entertainment.

Here’s a look at some of the pending and possible combinations:

Fox with Disney or Comcast

Disney has made a $52.4 billion all-stock offer for the bulk of Twenty-First Century Fox, including the studios behind the “Avatar” movies, “The Simpsons” and “Modern Family,” along with National Geographic. Marvel would get back the characters previously licensed to Fox, reuniting X-Men with the Avengers.

But Comcast has said it is preparing an all-cash offer that is superior to Disney’s. It will likely make an offer soon, now that the judge has ruled on AT&T.

Fox previously rejected a bid from an unnamed suitor, widely believed to be Comcast, because of potential regulatory roadblocks. AT&T’s favorable ruling would seem to clear those objections. U.S. District Judge Richard Leon rejected the government’s argument that AT&T’s takeover of Time Warner would hurt competition in pay TV and cost consumers hundreds of millions of dollars more to stream TV and movies.

If Comcast succeeds in outbidding Disney, a major cable distributor would control even more channels on its lineup and those of its rivals. That could lead to higher cable bills or make it more difficult for online alternatives to emerge, though there is not yet evidence of either happening following other mergers. For Disney, a successful Comcast bid could make Disney’s planned streaming service less attractive.

Sprint and T-Mobile

In April, the two telecom companies announced a $26.5 billion combination. The deal would combine the nation’s third- and fourth-largest wireless companies and bulk them up to a similar size to Verizon and AT&T, the industry giants.

The worry is that with just three major carriers, there would be less incentive to keep innovating on prices and service. T-Mobile and Sprint might even raise prices now that they don’t have to try to poach customers off each other.

A 2014 attempt to combine fell apart amid resistance from the Obama administration. But the industry is different just four years later. Wireless carriers aren’t just competing with each other, but also with Comcast and others as the wireless, broadband and video industries converge. AT&T is about to get larger with CNN, HBO and other channels from Time Warner. Beyond combining with each other, T-Mobile and Sprint might need its own content acquisition to compete.

CBS and Viacom

CBS has resisted pressure from its controlling shareholder, National Amusements, to merge with Viacom, which also is controlled by National Amusements. The two companies used to be one but separated in 2005.

A combination would reunite CBS’s television business with Viacom’s production studios, similar to the arrangements now in place at NBC owner Comcast and ABC owner Disney. (On the flip side, the Fox television network and studios would separate under a deal with either Comcast or Disney.)