The Time Warner-AT&T Merger: Trump’s Waterloo?

Ken AshfordPolitical Scandals, Trump & AdministrationLeave a Comment

Politico reports:

AT&T and Time Warner are under pressure from the Justice Department to offload CNN to win the Trump administration’s approval of their $85 billion merger, according to sources familiar with the discussions.

DOJ is demanding the sale of Time Warner’s Turner Broadcasting, which includes CNN as well as networks like TBS and TNT, one of the sources said — adding that it’s clear the real sticking point is CNN, a frequent target of President Donald Trump’s anger.

“The only reason you would divest CNN would be to kowtow to the president because he doesn’t like the coverage,” another source said. “It would send a chilling message to every news organization in the country.”

The Justice Department declined to comment.

AT&T and Time Warner see no legal basis for selling any media properties at stake in the deal, and their lawyers are preparing for a court battle should the Justice Department ultimately reject the merger, the sources said. The Wall Street Journal reported last week that DOJ is preparing a lawsuit in the event it can’t reach a settlement with the companies.

The question is…. why would Time Warner have to divest itself of CNN? Yes, if Comcast (which owns NBC) and Disney (which owns ABC) were to merge, then it would make sense for the DOJ to ask one of them to divest itself of a TV network. But there is no problem of a monopoly with Time Warner and AT&T, because the latter does not own a news network.

Yes, there are critics — myself included — that the telecom/media industry is blurring too much, and maybe that would be a reason why the merger should not go through. But selling CNN does not seem to fix that particular objection.

What this appears to be is retaliation by the Trump Administration against CNN for their so-called “fake news”. The New York Times reported in July that White House advisers had discussed using the merger as “a potential point of leverage over their adversary”:

White House advisers have discussed a potential point of leverage over their adversary, a senior administration official said: a pending merger between CNN’s parent company, Time Warner, and AT&T. Mr. Trump’s Justice Department will decide whether to approve the merger, and while analysts say there is little to stop the deal from moving forward, the president’s animus toward CNN remains a wild card.

This prompted Democratic senators to warn the White House against exerting any “political interference” in the deal.

Lawmakers and the public should demand answers from the Administration. There had better be a very good reason for this request, and there doesn’t appear to be one.

And it looks like the blowback on the DOJ has already begun:

To be continued….