WASHINGTON — Jun 12, 2018, 8:53 PM ET

Federal judge approves AT&T-Time Warner merger


A federal judge approved the $85 billion mega-merger of AT&T and Time Warner on Tuesday, potentially ushering in a wave of media consolidation while shaping how much consumers pay for streaming TV and movies.

U.S. District Judge Richard Leon green-lit the merger without imposing major conditions as some experts had expected. The Trump Justice Department had sued to block the $85 billion merger, arguing that it would hurt competition in cable and satellite TV and jack up costs to consumers for streaming TV and movies.

Now, the phone and pay-TV giant AT&T will be allowed to absorb the owner of CNN, HBO, the Warner Bros. movie studio, "Game of Thrones," coveted sports programming and other "must-see" shows. The Justice Department could appeal the ruling, although it said only that it is considering its options.

The ruling could open the floodgates to deal making in the fast-changing worlds of entertainment production and distribution. Major cable, satellite and phone companies are bulking up with purchases of entertainment conglomerates to compete against rivals born on the internet such as Amazon and Google.

Waiting in the wings are potential big-billions deals involving 21st Century Fox and Disney, Verizon and CBS, T-Mobile and Sprint. Comcast and Verizon are also jockeying for position in the new landscape.

A combined AT&T-Time Warner could also get a boost from Monday's official end of net neutrality —the Obama-era rules that barred broadband and wireless companies from favoring their own services to the detriment of rivals like Netflix. AT&T and Verizon now can give priority on their networks to their own movies and TV shows, while hurting rivals such as Amazon, YouTube and future startups.

"The impact from this decision will have wide reaching ramifications across the telecommunications, media, and tech industry for decades to come," said GBH Insights analyst Dan Ives.

The merger would combine a company that produces news and entertainment with one that funnels that programming to consumers. AT&T cast it as a necessary step at a time when people spend more time watching video on phones and tablets and less time on traditional live TV on a big screen.

Leon said the government failed to prove that the merger would lead to higher prices and other harm to consumers. Despite Justice Department lawyers taking their "best shot," he said, their evidence was "too thin a reed for this court to rely on."

Leon added that he wouldn't temporarily block the merger for a possible appeal by the government. The "drop dead" deadline for completing the merger is June 21. If it's not wrapped up by then, either company could walk away, and AT&T would have to pay a $500 million breakup fee.

The ruling was a stinging defeat for the Justice Department. Opposing the merger forced federal antitrust lawyers to argue against standing legal doctrine that favors mergers among companies that don't compete directly with each other.

Another wild card: When first announced in October 2016 , the deal drew fire from then-candidate Donald Trump, who promised to kill it "because it's too much concentration of power in the hands of too few." Trump has also publicly feuded with Time Warner's CNN, calling it "failing" and a purveyor of "fake news." The president's statements didn't come up during the trial.

John Bergmayer, senior counsel at the consumer group Public Knowledge, said the decision could have long-lasting negative effects thanks to "the many other mergers it will encourage." In a statement, Bergmayer called for "reinvigorated regulatory oversight of the video marketplace."

Dallas-based AT&T is a wireless, broadband and satellite behemoth that became the country's biggest pay-TV provider with its purchase of DirecTV. It claims about 25 million of the 90 million or so U.S. households that are pay-TV customers.

AT&T general counsel David McAtee said the company plans to close the deal on or before June 20.

News - Federal judge approves AT&T-Time Warner merger

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  • rampantlion

    Anti-Trust is, apparently, dead.

  • ha

    "Competition is good" -- Capitalist mantra.


  • Skip

    Trump loses again.

  • BobFelder

    There are 1500 newspapers, 1100 magazines, 9000 radio stations, 1500 TV stations, and 2400 publishers in the US. All owned by 6 corporations.
    We don't need more mergers.

  • John Michael Davis

    I usually don't like these big mergers, but I like this one! #F-Trump

  • Ted Mittelstaedt

    Content is king and these media conglomerates are dependent on a steady flow of new content. The public has shown before they will jump on new content that comes out of the woodwork from unknowns operating outside of the established conglomerates before. Just being big is no guarantee you can make a good movie or tv show.

  • Nearl45 61

    We have a lot of goofy people here.

    Folks your bills were already going up with or without this merger.

    The merger doesn’t affect this fact.

  • Enough Already

    AT&T probably payed off this judge like they payed off Cohen earlier in the year.

  • earl34

    federal judge will now be quitting the bench and joining Fox news. Wonder if the money he received from AT&T is in a Russian bank? My cable bill is 166.00 dollars a month. Cable will be gone soon. Maybe the phone.

  • Steve20009

    And the wealthy smile. Sanders is correct.

  • Stephen Bishop

    There goes your internet bill through the roof.

  • gmannfromchitown

    OK everybody it’s time to disconnect because things are about to get even more expensive. Nothing on cable or the Internet anyway.

  • Millard Farquar

    No wonder my rates are going up.

  • Reason

    Another idiot judge who cares nothing for the American consumer. They can do whatever they want - and they ARE a monopoly.

  • Mandy Gershon

    What was this judge thinking?!

  • DFW-Texas

    Not the cable company folks:
    The acquisition will create one of the most powerful companies in global media, marrying AT&T's widespread consumer distribution capabilities with the crown jewels of Time Warner, including HBO, Warner Bros. film and TV studios, and TV channels including CNN, TNT and TBS.

  • Mike D

    Now we can add cable to "no good phone plans" out there. Hope they don't go after Verizon wireless next!

  • ruelph

    Another court case Trump lost, it appears this case was filed by DOJ because he (Trump) doesn't like CNN correcting his lies.

  • Technophile

    Don’t worry guys once musks global satellite internet network is in place these providers are going to be done for. Cheap access to gig internet with low latency without the need for expensive fiber infrastructure is a recepie for disaster for cable companies

  • Nearl45 61

    Vertical merger. No evidence of Higher costs for customers because head to head competition is still preserved.

    However I expect Trump to ask for an injunction...

    ... just because he’s a stubborn vindictive dictator wannabe.

  • GorillaMyDreams

    Bad move. We have too few media outlets already, and this opens the door to more buyouts. Comcast was waiting for this decision; now it will compete with Disney to buy Fox.

  • Betty Bloop

    here we go.....no more net neutrality and entertainment/cable conglomerates -- soon cable boxes will be a thing of the past and all programming will be either fast-streamed or effectively blocked depending upon the packages you buy....choices will be less, not more.

  • John Smith

    Trumps motto should be "America's Wealthy First!" This is going to take a long time to fix what this imbecile has broken.

  • katerant

    This type of move is never in favor of the consumer.

  • snake

    Netflix,Google,Facebook, & Comcast have already assembled more content and ad revenue so the argument to government made to block the merger was laughable. The entertainment business has evolved and ATT is just trying to stay in the game.

  • mik8888

    It appears Donald has been slapped in the face yet again...you'd think he would be tired by now...

    In a bizarre twist of fate, Trump's removal of the net neutrality provisions, have actually promoted large media and content companies to merge, since it does give them more options to offer more quality programming...and potentially at lower prices too...

  • pfon71361

    This mega-merger of AT&T and Time Warner along with the recent repeal of Net Neutrality gives many web and cable consumers less, not more, choice. Wringing more and more efficiencies to compete with rivals in any business helps improve a company's bottom line but what happens when those rivals dwindle to only a few? The incentive to keep prices low is far less if your competitors such as Verizon are also seeking to consolidate and grow larger. In the process of acquiring massive debt and huge obligations to shareholders through these mergers, the remaining players in this game of musical chairs must inevitably raise prices as well. Cord-cutters sharpen your scissors.

  • CalRep21

    Those of us who use these services will be paying more, less competition equals higher prices.

  • dustyrivers ✓ᵛᵉʳᶦᶠᶦᵉᵈ

    Ha, ha! I'd love to be there when Donnie boy finds out. There'll be some ranting tweets about how Sessions screwed up again to be sure.

    Just soooo much winning !!

  • Now Look Sad and Say D'oh!

    "The Trump Justice Department had sued to block the $85 billion merger, arguing that it would hurt competition in cable and satellite TV and jack up costs to consumers for streaming TV and movies."

    Wait a second - I agree with the Trump administration on something??? This is...uncomfortable.

  • anastasiabeaverhousen

    Great. Just what we need; still further concentration of control of our corporate media.