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Is the AT&T; merger with Time Warner being threatened because of a beef with CNN?

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Regulators are threatening AT&T's merger with Time Warner, and it doesn't make sense

Photo by Toby Jorrin/Getty Images

A new report from the Financial Times has pinpointed the precise nature of the holdup in the Department of Justice’s pushback on the AT&T-Time Warner deal: CNN, which sources claim the Justice Department is insisting that AT&T sell before it will allow the deal to take place.

Earlier today, news broke that the US Justice Department was asking AT&T to divest some of its assets before it would allow AT&T and Time Warner’s massive $85 billion merger to go through, according to Reuters, but it wasn’t clear exactly which properties it would be requesting the combined company to divest. But according to a source for the Financial Times. “It’s all about CNN,” and that if AT&T agreed to sell the news network the deal would go through.

The New York Times offered additional detail, adding that the Justice Department is asking Time Warner to either sell Turner Broadcasting — a group of channels that includes CNN, TBS, TNT, and Cartoon Network — or for AT&T to sell its DirecTV division in order for the deal to be approved. Other major media properties that would be part of the deal, including HBO and Warner Bros. Entertainment, are apparently not included in the DOJ’s requests for divestment.

The nature of request is colored, of course, by the fact that President Trump has been fiercely opposed to the AT&T / Time Warner deal, noting on the campaign trail that it would be “a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few.” That CNN would be the sudden point of contention is also notable given Trump’s public disdain for the news network, which he frequently dubs “fake news.”

It’s also curious what anti-trust issues the Department of Justice could have with AT&T’s ownership of both Turner Broadcasting and DirecTV, given that the two groups aren’t in direct competition. Additionally, it’s strange that the Justice Department is singling out Turner Broadcasting specifically, and not other networks like HBO or The CW (which is a publicly available over-the-air network), which would also be included in the Time Warner deal.

According to the Financial Times, AT&T is against selling CNN, with AT&T CEO Randall commenting that "throughout this process, I have never offered to sell CNN and have no intention of doing so." The NYT notes that should the DOJ make its demands a formal request that the two companies would likely contest the claim in court.

Update November 8th, 3:50PM: According to CNN’s Brian Stelter, the Department of Justice claims that AT&T privately offered to sell CNN. AT&T CEO Randall Stephenson has refuted those claims.

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