AT&T-Time Warner merger win draws mixed reactions

U.S. Justice Department
The U.S. Justice Department building. (Coolcaesar/Wikimedia)

AT&T scored a landmark victory Tuesday when the court denied the Justice Department’s attempted block and OK’d its $85 billion merger with Time Warner. Reactions around the industry were decidedly mixed.

Both AT&T and Time Warner chimed in immediately to applaud the outcome.

“We are pleased that, after conducting a full and fair trial on the merits, the Court has categorically rejected the government’s lawsuit to block our merger with Time Warner,” AT&T General Counsel David McAtee said in a statement.

Time Warner was more accusatory in its reaction, leveling claims of political bias toward the DOJ’s case.

"The Court's resounding rejection of the government's arguments is confirmation that this was a case that was baseless, political in its motivation and should never have been brought in the first place," Time Warner spokesman Gary Ginsberg said in a statement.

RELATED: It’s official: AT&T-Time Warner merger approved

The decision was surely welcomed by other media giants like Comcast, Disney and Fox, who not only saw a stock boost as a result but now have a clearer, longer runway for further M&A. Comcast as soon as today could show up with its rival bid for Fox’s entertainment assets, which are currently promised to Disney as part of a $52.4 billion deal.

Elsewhere, the deal approval earned high marks from the Communications Workers of America union, which liked the job creation potential of the merger.

“As in AT&T’s acquisitions of DIRECTV and various wireless companies, the growth of this profitable company should be accompanied by the growth of good, union jobs. It is time for AT&T to resolve the outstanding contract negotiations in the Midwest and Legacy T, where workers have been standing up to save and grow jobs in their communities. Likewise, with this new acquisition, ensuring the freedom of workers at the combined company to join together and have a seat at the table is critical,” the CWA said in a statement.

But, as was the case since AT&T announced the deal and during the trial, the megamerger maintained many detractors.

U. S. Senator Amy Klobuchar, D-Minn., the ranking member of the Senate Judiciary Subcommittee on Antitrust, Competition, Policy and Consumer Rights, blasted the decision by U.S. District Court Judge Richard Leon.

“Allowing this merger to proceed raises serious concerns for consumers and the future of American media, and also sends a troubling signal to others that it’s open season for vertical mergers that could allow a company to raise the cost of essential products and services that its rivals need to compete, leading to higher costs for consumers and less innovation. I urge the Justice Department to take swift action to appeal this judgment to ensure that competition and consumers are protected,” Klobuchar said in a statement.

The American Cable Association joined Klobuchar in condemning the merger decision and urged the DOJ and FCC to refocus efforts on investigating potential harms stemming from Comcast’s similar vertical merger with NBCUniversal. The group demanded federal agencies block any attempt by Comcast to buy Fox.

“The American Cable Association is disappointed that the Court did not block the AT&T/Time Warner merger or did not enhance the commercial arbitration offer made by AT&T/Time Warner, which did not apply to HBO and had other major flaws. The Court’s decision runs counter to numerous findings over the past 15 years by the Federal Communications Commission (FCC) and Department of Justice (DOJ) that vertical combinations between video programmers and distributors require robust conditions to constrain the incentive and ability of the combined firm to raise prices to rivals and reduce choice. For these reasons, the Court’s opinion is out of the mainstream,” the ACA said in a statement.

President Donald Trump, who criticized the deal when it was announced in 2016, did not immediately weigh in on the court’s decision.