News Analysis
Several news organizations yesterday reported that the Justice Department is demanding that AT&T sell either DIRECTV or Turner (which owns CNN, a subject of President Trump’s ire) to get approval of its merger with Time Warner.
First, allow me to note that I have been saying for nearly a year that the Trump administration would oppose the AT&T/Time Warner merger if CNN and Trump didn’t bury the hatchet (an unlikely scenario). And the blood war between the two has only escalated this year with CNN’s aggressive coverage of the investigation into the president’s alleged collusion with Russia during the 2016 election.
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While many say a president should not try to influence an agency’s decision on a legal issue, President Trump has made it abundantly clear that he opposes the merger, in no small part because AT&T would assume control of CNN.
If Trump hasn’t picked up the phone to chat with the reviewing Justice Department officials, it’s only because he knows he doesn’t have to. The DOJ attorneys and politicians can read, just like everyone else.
But what about AT&T selling off DIRECTV, or CNN? Would it actually do that?
No.
AT&T would never sell DIRECTV at this point. The company paid $67 billion for DIRECTV in 2015 and the satcaster remains a critical part of AT&T’s short and long-term strategy for delivering content and Internet service to American homes. Without DIRECTV, the Time Warner merger doesn’t make sense. Why buy Time Warner’s content portfolio if you don’t have DIRECTV to help bring it to the home?
Plus, one could argue that the value of DIRECTV has declined slightly since 2015 due to widespread investor fears that a significant number of pay TV subscribers are contemplating cutting or shaving the cord.
So you can forget about a DIRECTV sell-off.
But what about CNN?
It says here that AT&T will not considering selling off the news network, either. At this point, it would be seen as a wholesale capitulation to the Trump Administration. Journalists would say that AT&T abandoned CNN just to get its ‘greedy’ merger approved, which would certainly do little to improve AT&T’s image at a time when it desperately wants to be perceived as consumer-friendly.
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Also worth noting: CNN is making money, in no small part to the public’s growing interest in all things Trump. Why would AT&T jettison a reliable earner?
So if the Justice Department continues to demand the sale of DIRECTV or Turner (with CNN), it says here that AT&T will say no, and so will the Trump administration. The Justice Department will reject the deal and then go to court to block it from proceeding.
The big question then becomes: Is the merger so important to AT&T that it would spend even more money on top of its $85 billion offer for Time Warner on what could be a lengthy court battle?
I have doubt, serious doubts, that AT&T will conclude that it is.
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(which would certainly do little to improve AT&T’s image at a time when it desperately wants to be perceived as consumer-friendly.)
This part is Funny !!
AT&T has gone OUT of it’s way to TELL Customer’s “GET LOST” we HATE CUSTOMER’S
When a Company send it Customer’s Service Calls OVERSEAS to Places that do NOT Speak or Understand ENGLISH should tell us something.
Yeah, I don’t see AT&T as customer friendly. DirecTV has been. I signed on when DTV became available to me and have been a customer since. The cord cutter cometh soon thanks to AT&T’s deaf ear to its customers.
Interesting take. I believe that AT&T will in fact take this to court. They will use Trump as a scapegoat similar to what Bergdahl’s lawyers did.