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The AT&T/Time Warner deal gets blasted from both sides

Donald Trump, Tim Kaine, Bernie Sanders and Al Franken all expressed concern over antitrust

Financial trends and news by Steven Loeb
October 24, 2016 | Comments
Short URL: http://vator.tv/n/47c5

The big news over the weekend was the announced deal for AT&T to buy Time Warner in a stock-and-cash transaction valued at $107.50 per share, bringing the total price to $85.4 billion. 

The agreement has been approved unanimously by the boards of directors of both companies, but still has to go through regulatory approval by the U.S. Department of Justice, and, potentially, the Federal Communications Commission, who have to determine if the deal creates a monopoly.

Through this deal, AT&T would be getting its hands on a whole host of big properties, including HBO, and its streaming services HBO Now and HBO Go.; Warner Bros. Entertainment, which includes Harry Potter and DC Comics; Turner, which consists basic cable networks including TNT, TBS, CNN and Cartoon Network/Adult Swim, along with the NBA, March Madness and MLB.

Time Warner also has invested in digital media properties such as Hulu, Bleacher Report, CNN.com and Fandango.

Needless to say, this is a very big deal: it would allow AT&T to not only control distribution of content, but the content itself. That could very well create a situation where AT&T gives preferential treatment to its own library, while giving its competitors short shrift.

Numerous political figures have already expressed concerns of what the deal might mean for consumers, including both presidential campaigns.

Repubican Presidential candidate Donald Trump blasted the deal almost immediately, saying, "Deals like this destroy democracy."

"As an example of the power structure I'm fighting, AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it's too much concentration of power in the hands of too few," Trump said during a speech on Saturday.

While Hillary Clinton has not made a public statement about the proposed merger, a key member of her campaign staff has. 

"I share those concerns and questions. We've got to get to the bottom of them. Generally, pro-competition, and less concentration, I think, is generally helpful especially in the media," Democratic Vice Presidential candidate Tim Kaine said on NBC's "Meet the Press" on Sunday, while also noting he hasn't had the chance to look into the details of the deal yet. 

Others who have made their concerns known include Minnesota Senator Al Franken.

 “AT&T’s reported proposal to acquire Time Warner for more than $80 billion raises some immediate flags about consolidation in the media market, which is an area I’ve worked to address for years,” he said in a statement on Saturday.

I’m skeptical of huge media mergers because they can lead to higher costs, fewer choices, and even worse service for consumers. And regulators often agree, like when Comcast unsuccessfully tried to buy Time Warner Cable, a deal that I fiercely opposed. In the coming days, I’m going to be pressing for further details about this reported deal and how it would affect the American consumer, who deserves access to the content they want and whose pocketbook continues to be squeezed by rising cable and internet costs."

Also against the deal is Vermont Senator, and one-time presidential hopeful, Bernie Sanders, who wrote on Twitter that the Obama administration should "kill the Time Warner-AT&T merger," as it "would mean higher prices and fewer choices for the American people."

Senators Mike Lee of Utah, and Amy Klobuchar of Minnesota, the chairman and ranking member of the Senate Judiciary Subcommittee on Antitrust, issued a joint statement on the merger, in which they said that there are potential concerns about the deal. 

“As Chairman and Ranking Member of the Antitrust Subcommittee, we have carefully examined consolidation in the cable and video content industries to ensure that it does not harm consumers. An acquisition of Time Warner by AT&T would potentially raise significant antitrust issues, which the subcommittee would carefully examine," they wrote. 

Lee and Klobuchar later said that there will be a hearing, which will take place at some point in November, though no official date has been set. 

Even one of the potential competitors against At&T/Time Warner had something to say about it.

“It’s a tough hypothetical, mostly because deals of this size in the industry are unprecedented. I’m sure it’s going to have a lot of DOJ scrutiny,” Netflix chief content officer Ted Sarandos said at USC’s Entertainment Law and Business conference, on Saturday. 

“Those are pretty powerful assets. I’m sure it will come under a great deal of scrutiny.”

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