AT&T CEO says open to litigation on Time Warner deal

  • AT&T CEO says open to litigation on Time Warner deal

AT&T CEO says open to litigation on Time Warner deal

Sources say the Department of Justice (DoJ) may make the deal conditional on the disposal of either Turner Broadcasting - which includes CNN, Cartoon Network and sports channels - or satellite broadcaster DirecTV.

Justice Department sources told The Hill and other outlets earlier this week that AT&T had offered to sell CNN from the combined company to get the merger approved by regulators. The move is likely to draw criticism and could be seen as political payback, since US President Donald Trump has repeatedly criticized CNN for its coverage of him, calling it "fake news".

CNN and its parent company Time Warner were in the spotlight this week over reports that the Trump administration wanted CNN sold as a condition of a merger between AT&T and Time Warner. But John Stephens, AT&T's chief financial officer, told a conference with investors in NY earlier Wednesday that the date to finalize the merger was now "uncertain" because of ongoing negotiations with the government authorities. The White House has also said that Trump has not spoken to Attorney General Jeff Sessions about the matter, nor were any White House officials authorized to speak to DOJ on it. Stephenson, however, made it clear that AT&T was prepared to fight attempts to block the deal.

The Trump Administration's relationship with the media and particularly with CNN has come under close scrutiny as the government reviews Time Warner's pending sale to AT&T. "We'll see how it all plays out", Trump said aboard Air Force One, according to the White House's official transcript of the exchange. "It's time to settle, or it's time to go to court", he said. Time Warner shares fell just under 1% to close at $87.05. It would then supply its video - HBO, CNN, TBS and the Warner Bros. movie studio - while providing access to the internet for millions of Americans. Several Democratic lawmakers have also pushed back against the combination.

Being forced to sell off Turner is probably a "nonstarter" for AT&T, New Street Research analyst Jonathan Chaplin said.

"This is a classic vertical merger".

The DoJ has said it does not comment on ongoing investigations.