The Trump administration is asking AT&T and Time Warner Inc. to sell off either CNN or DirecTV in order to win government approval of their merger, multiple news outlets reported today.
AT&T has owned DirecTV since 2015 and is now seeking federal approval to purchase Time Warner Inc., the owner of programming such as HBO, CNN, and Warner Bros.
But a merged AT&T/Time Warner reportedly could keep CNN if it’s willing to sell DirecTV instead. CNBC said it has “confirmed the Justice Department has asked AT&T to sell Turner Broadcasting, which includes CNN, or sell DirecTV for merger approval.”
Legal fight may be forthcoming
The government’s stance could lead to a legal battle. “If the Justice Department formally makes either demand a requisite for approval, AT&T and Time Warner would almost certainly take the matter to court to challenge the government’s legal basis for blocking their deal,” The New York Times wrote.
Until today, AT&T expressed confidence that it would wrap up the acquisition by the end of this year. But today, AT&T CFO John Stephens said that “the timing of the closing of the deal is now uncertain.”
AT&T said it will not sell CNN. “Until now, we’ve never commented on our discussions with the DOJ,” AT&T CEO Randall Stephenson said in a statement provided to Ars. “But given 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.”
Trump has continually criticized CNN’s news coverage, calling it “fake news” or “fraud news.” When he campaigned for president, Trump said that AT&T/Time Warner is “a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few.” Last month, Trump said that various networks should have their licenses challenged and possibly revoked because “network news has become so partisan, distorted, and fake.”
But until recently, the Trump administration did not appear like it would take any steps to block or hinder the merger in any serious way. Going forward, the DOJ could file a lawsuit to block the proposed merger while at the same time filing a proposed settlement that would allow the deal to be approved. AT&T could battle the DOJ in court if it doesn’t agree to proposed settlement terms.
Senate Democrats have urged the Department of Justice to block AT&T’s proposed acquisition of Time Warner, saying that “the combined company’s unmatched control of popular content and the distribution of that content will lead to higher prices, fewer choices, and poorer quality services for Americans.”
Separately, US Senator Amy Klobuchar (D-Minn.) has warned that the White House should not interfere in the merger evaluation process. “Any political interference in antitrust enforcement is unacceptable,” she said in a letter to US Attorney General Jeff Sessions in July.
In a new interview with CNN, Trump Counselor Kellyanne Conway denied that Trump is interfering with the DOJ’s review of the merger.