- The US Department of Justice told AT&T and Time Warner that they must sell Turner Broadcasting – which includes CNN – or DirecTV if it wants to receive approval for their massive merger. AT&T CEO Randall Stephenson told Business Insider, “I have never offered to sell CNN and have no intention of doing so.” US President Donald Trump has criticized both CNN and the mega-deal on many occasions in the past. These latest developments have thrown into question when the deal will ultimately close, if it does at all.
The US Department of Justice has informed AT&T and Time Warner that they must sell Turner Broadcasting, the group of channels that includes CNN, if they want approval for their $84.5 billion merger, according to a New York Times report citing people briefed on the matter.
AT&T chief executive officer Randall Stephenson told Business Insider on Wednesday that he had no plans to do that.
“Until now, we’ve never commented on our discussions with the DOJ,” Stephenson said in a written statement. “But given the DOJ’s statement this afternoon, it’s important to set the record straight. Throughout this process, I have never offered to sell CNN and have no intention of doing so.”
The proposed divestiture of Turner is one of several demands being made by regulators as they assess antitrust concerns surrounding the AT&T-Time Warner deal, a report from the Financial Times said. It is, however, the condition viewed as the most likely sticking point as AT&T has opposed it in the past and argued the deal isn’t anticompetitive.
The other avenue AT&T could take to get the deal approved would be for it to sell its DirecTV division, according to The Times’ report. If the DOJ makes either demand official, AT&T and Time Warner would almost certainly take the matter to court, The Times added.
The reported demands by Trump’s DOJ come on the heels of repeated instances of the president calling CNN “fake news.” Trump also criticized the proposed acquisition near the end of his presidential campaign, saying that “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 in an October 22 speech.
Trump’s concerns echo those expressed by many critics of the proposed deal who think too much consolidation in the media and telecom industries is ultimately bad for both. Still, antitrust experts have said that on a strictly legal basis, fighting the deal might be difficult for the DOJ.
Earlier on Wednesday, AT&T Chief Financial Officer John Stephens hinted at the struggles it was facing with the DOJ, saying amid discussions that the timing of the deal closing was “now uncertain.”
These latest developments throws into question the timetable laid out by both companies in late October, when they the deal would be completed by the end of 2017.
Time Warner’s stock dropped as much as 6.9% on the news, while AT&T climbed 1.1%.
Steve Kovach contributed reporting.