ONE OF Wall Street’s biggest hedge funds, Elliott Management Corp., led by the billionaire investor Paul Singer, has the conglomerate AT&T in its crosshairs. The hedge fund, with $38 billion under management, disclosed it has acquired $3.2 billion of AT&T and is launching a campaign to shake up the company. This is a tactic used by activist investors who seek to change underperforming companies by slicing costs, divesting non-core assets and streamlining bureaucracy, among other things.
A letter from Elliott calls on AT&T to make significant changes. Notably, the letter questions the logic of AT&T’s $106 billion acquisition of Time Warner in 2016, a merger the Trump administration tried in vain to stop. Elliot Management says, “AT&T has yet to articulate a clear strategic rationale for why AT&T needs to own Time Warner,” and “we remain cautious on the benefits of this combination.” The hedge fund calls on AT&T to review assets for possible divestiture.
One of AT&T’s assets is the vibrant and profitable television news operation CNN, now part of its WarnerMedia division. Although Elliot Management did not single out CNN in its letter, President Trump immediately pounced. For years, he has railed against CNN and labeled the network and the news media in general as the “enemy of the people,” using an old Stalinist formula. Mr. Trump said on Twitter last Monday morning, “Great news that an activist investor is now involved with AT&T. As the owner of VERY LOW RATINGS @CNN, perhaps they will now put a stop to all of the Fake News emanating from its non-credible ‘anchors.’ ” Mr. Trump called CNN “bad for the USA,” said it “spews bad information & Fake News all over the globe” and is “a fraudulent shame.” Mr. Trump surely knows that Mr. Singer, who did not support him in 2016, later contributed $1 million to his inaugural committee and has been a major GOP donor.
What’s wrong with this picture is that Mr. Trump is openly hinting that CNN should be sold off in an effort to modify its coverage to something more of his liking. This is an increasingly common tactic among authoritarian leaders: no need to shutter a TV station, just find a friendly businessman or oligarch to buy it. Ask President Vladimir Putin of Russia, Viktor Orban of Hungary or Recep Tayyip Erdogan of Turkey how it is done. Mr. Trump wears his motives on his sleeve. He has been unceasing in his campaign to discredit specific news media organizations, including the New York Times and The Post, which is owned by Jeff Bezos, the founder and chief executive of Amazon. Mr. Trump has repeatedly taken sideswipes at Mr. Bezos and Amazon’s business affairs, such as its use of the U.S. Postal Service and a bid for a Pentagon cloud-computing contract.
Mr. Trump’s tweet about AT&T and CNN was unseemly. News media ownership in the United States is not based on the president’s whims. He ought not use the bully pulpit to meddle in it.