A federal judge ruled on Tuesday that the $85 billion merger of AT&T and Time Warner Inc. may proceed, after a six-week trial in which the government tried to argue that the deal would harm consumers. There are lots of implications. It’s a green light for big businesses seeking to merge, and it makes AT&T a massive player in the entertainment and news realms. And the Justice Department’s loss here — in a ruling that carried harsh words from the judge — raises the question whether President Trump’s avowed distaste for the deal and Time Warner-owned CNN led the Justice Department to mistakenly litigate against the purchase.
For the purposes of this blog, however, the implications are pretty well confined to one property in the deal: CNN, which has been attacked again and again by Trump for allegedly broadcasting “fake news” when, in fact, CNN has reported fact after disturbing fact about the White House — with some well-covered blunders now and again.
There was the time the network retracted a report on Trump associate Anthony Scaramucci, a fiasco that included the sudden resignation of three veteran staffers at CNN; there was the time CNN botched a WikiLeaks-related story about Donald Trump Jr.; and there was the time a photograph of comedian Kathy Griffin — who worked on the network’s New Year’s Eve specials — appeared in a photo holding the likeness of a severed head of Trump. Griffin was cut loose from future engagements. Trump backers roared half in anger and half in schadenfreude.
And there are the various times — routine transactions — when a Jim Acosta or a Jake Tapper will tangle with Trump administration officials. All these events create waves — waves of social-media outrage, waves of lawyer letters, waves of generalized guff.
Sure: AT&T has encountered controversy, like when it was sued more than a decade ago for allegedly cooperating with eavesdropping by the National Security Agency. But look at the company’s annual report: It makes money by furnishing video services, broadband services, voice services, business services, advertising and analytics services, and so on. The sort of flack that comes from on-boarding a property like CNN may occasion a new shock wave or two.
Big telecom companies — see Comcast, for example — have felt compelled to add media and entertainment properties to their portfolios as they seek to compete in modern times. And AT&T chief executive Randall Stephenson last year scoffed at suggestions that his company might need to spin off CNN to clear regulatory hurdles. “I don’t know why we’d even talk about that,” he said. “It doesn’t seem relevant to approving a deal like this. What would be the competitive issue that you’re remedying with spinning off CNN? There are not competitive issues with owning CNN.” The company’s defiance regarding CNN didn’t end there.
Now that AT&T will be getting CNN, it’ll learn: Owning a lightning-rod news organization is far more than a business proposition.