Time Warner Execs Increasingly Skeptical Of AT&T Deal: Report

Some Time Warner executives are becoming increasingly skeptical of the company's pending merger with AT&T valued at over $86 billion, Vanity Fair reported earlier this week as part of a comprehensive expose of the growing turmoil at the New York City-based media conglomerate. The legal clash between AT&T and the United States Department of Justice that started with a trial earlier this month is now progressing in a manner that the telecom giant wasn't hoping for, with its request for official communication between the federal agency and the White House being rejected. AT&T previously attempted arguing the lawsuit meant to block its proposed consolidation is a result of illegal political pressure from President Trump who's been locked in a fierce public battle with CNN even before winning the late 2016 presidential election.

As a division of Time Warner-owned Turner, some insiders previously pointed to CNN as the reason for the deal being blocked. According to more recent information, not everyone is convinced of that being the case any longer, with Judge Richard Leon being at least one notable party on that list of skeptics, having been the one who dismissed AT&T's aforementioned request. CNN President Jeff Zucker appears to be at ease with the ordeal, having said the trial should be left to play out earlier this week. Insiders claim CNN employees aren't particularly enthusiastic about the merger in the first place, describing it as an unknown in terms of their contracts and how they might change under AT&T's ownership. As a member of Time Warner's corporate family, CNN is understood to be offering some of the best health insurance and other benefits in the industry.

AT&T previously argued it needs Time Warner and vice versa if the two are to compete with digital powerhouses such as Facebook and Netflix in terms of content, whereas the DOJ raised concerns about the antitrust implications of the tie-up even without any competition being directly removed with the deal as the move would theoretically allow AT&T to raise the prices of licensing Time Warner's content to its distribution rivals. The agency previously unsuccessfully attempted to pressure AT&T into divesting either DIRECTV or pledging to sell off Turner in order to have the merger approved, insiders claimed. Following two extensions, the deadline for the conclusion of the acquisition is now set for June 21, and if the deal isn't done by then, Time Warner could walk away from it without penalty. At that point, the company should negotiate its own merger terms or look for a suitor willing to pay more, some Time Warner executives believe. If the court rejects AT&T's arguments before that date, the firm is likely to be in an even more difficult position to convince Time Warner to stick with it throughout its appeal without upping its bid in a significant manner.

A third option that's said to have been heavily discussed among the media conglomerate's ranks was to spin off a part of Turner as a public company in which AT&T would be a shareholder and hold a majority vote at its board but wouldn't be capable of controlling executive decisions. Time Warner is likely to be acquired by AT&T or someone else in the near future regardless of the outcome of the trial that could change U.S. antitrust law with a major precedent, most insiders agree.

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Dominik Bosnjak

Head Editor
Dominik started at AndroidHeadlines in 2016 and is the Head Editor of the site today. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]