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Other mega-media deals could still face scrutiny

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WASHINGTON (AP) - The Latest on the resolution of the AT&T-Time Warner antitrust case: One expert warns that other mega-media deals will still face regulatory concerns despite AT&T's clearance to take over Time Warner.
    
David Turetsky, a professor at the State University of New York at Albany, says the AT&T ruling is based on "specific facts and evidence" that may or may not apply in other cases.
    
Larry Downes, project director at the Georgetown Center for Business and Public Policy, adds that the government had a poor case throughout the AT&T trial. He says the government was "just wrong from the start" on antitrust law and assumptions on how the media industry is evolving.
    
Still, Tuesday's ruling is likely to clear the way for other mega-media deals. For starters, Comcast is expected to make a bid for Fox's entertainment business as early as Wednesday. Comcast has promised to top Disney's $52.4 billion all-stock offer for the bulk of Twenty-First Century Fox. AT&T's favorable ruling would seem to clear any regulatory hesitation.
    
AT&T says it will complete its purchase of Time Warner by June 20 now that a federal judge has cleared the deal.
    
AT&T general counsel David McAtee says the company is "pleased" with the verdict after a "full and fair trial on merits."
    
Government lawyer Makan Delrahim says the Department of Justice is "disappointed" with the decision. In a statement, he warns that the pay-TV industry will be "less competitive and less innovative" as a result of merger.
    
The government could appeal. Delrahim says officials will review the decision and "consider next steps in light of our commitment to preserving competition for the benefit of American consumers."
    
In Tuesday's ruling, U.S. District Judge Richard Leon rejected the government's argument that the AT&T-Time Warner combination would hurt competition in pay TV and cost consumers hundreds of millions of dollars more to stream TV and movies.
    
Investors are welcoming a federal judge's approval of AT&T's $85 billion takeover of Time Warner.
    
A rejection might have chilled possible multibillion-dollar deals involving other media companies. Instead, a rush to consolidate is likely.
    
In after-market trading following the ruling, shares of Time Warner rose nearly 5 percent and AT&T shares fell 1.6 percent. Shares of Twenty-First Century Fox rose more than 4 percent, while Disney's stock dropped slightly more than 1 percent. Disney has a deal to buy the bulk of Fox, but Comcast is now expected to make a counterbid, especially with the favorable ruling for AT&T. Comcast shares fell 3.3 percent, though.
    
Shares of both T-Mobile and Sprint rose; their proposed combination is pending.
    
U.S. District Judge Richard Leon rejected the government's argument that the AT&T-Time Warner combination would hurt competition in pay TV and cost consumers hundreds of millions of dollars more to stream TV and movies.
    
U.S. District Judge Richard Leon said the government failed to meet its burden of proof in its antitrust suit against the AT&T-Time Warner merger.
    
Leon said the government had "taken its best shot" to oppose the merger. But, he added, "the government's evidence is too thin a reed for this court to rely on."
    
The judge made his remarks to a packed courtroom in an unusual session weeks after the trial ended.
    
Leon also said it would be harmful for him to put a temporary stay on the merger while the government appeals his decision, if it does so. The "drop dead" deadline for the merger to be completed is June 21. If not completed by then, either company could walk away, and AT&T would have to pay a $500 million breakup fee.
       
Now that a federal judge has approved AT&T's $85 billion takeover of Time Warner, other companies are likely to rush to consolidate.
    
Tuesday's ruling signaled that federal regulators will have a hard time stopping companies from getting bigger by gobbling up rivals and the programming they own. Even if a company doesn't need to get bigger right away, it might need to do so to prevent a competitor from overshadowing it.
    
For starters, expect Comcast to make a bid for Fox's entertainment business as early as Wednesday. Disney has made a $52.4 billion all-stock offer for the bulk of Twenty-First Century Fox, including the studios behind the "Avatar" movies, "The Simpsons" and "Modern Family." Comcast has promised to top that. AT&T's favorable ruling would seem to clear any regulatory hesitation.
    
A federal judge has approved AT&T's merger with Time Warner. He rejected the government's argument that it would hurt competition in pay TV and cost consumers hundreds of millions of dollars more to stream TV and movies.
    
U.S. District Judge Richard Leon announced the decision Tuesday, bringing the biggest antitrust trial in years to an end. The ruling blesses the $85 billion merger, one of the biggest media deals ever. It allows AT&T, a phone and pay-TV giant, to absorb the owner of CNN, HBO, the Warner Bros. movie studio, "Game of Thrones," coveted sports programming and other "must-see" shows.
    
The Department of Justice could decide to appeal the verdict. AT&T did not immediately respond to a request for comment.
    
The fate of the AT&T-Time Warner merger, a massive media deal opposed by the government that could shape how much consumers pay for streaming TV and movies, rests in the hands of a federal judge.
    
U.S. District Judge Richard Leon is expected to announce in court Tuesday his decision in the biggest antitrust trial in years. The Trump Justice Department sued to block the $85 billion merger, arguing that it would hurt competition in pay TV and cost consumers more to stream TV and movies.
    
The mega-merger is a high-stakes bet by AT&T Inc. on the synergy between companies that produce news and entertainment and those that funnel it to consumers - who spend more time watching video on phones and tablets and less time on traditional live TV on a big screen.

Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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