Cox’s Fenwick ‘very concerned’ about ‘horribly ugly’ AT&T-Time Warner deal

Cox executive Suzanne Fenwick
Cox Communications VP of Content Acquisition Suzanne Fenwick. (Cox Communications)

Testifying as the government’s first witness in the trial to determine whether AT&T can buy Time Warner Inc., Cox Communications executive Suzanne Fenwick said her company is “very concerned that we are going to be faced with a horribly ugly deal.”

The Washington, D.C., federal court trial got underway last week, with the DOJ trying to block AT&T’s $85 billion merger bid. Fenwick, VP of content acquisition for privately held Atlanta cable operator Cox, was called upon by the DOJ to speak to the impact on competitors like Cox, should a major pay TV distributor like AT&T acquire a huge programming conglomerate like Time Warner. 

According to Variety, Fenwick testified that the deal changes the leverage Cox enjoys with Time Warner-owned assets like Turner Networks. And if Cox could not come to terms to carry Turner channels including CNN, TBS and TNT, it would lose a “large number” of subscribers. 

Fenwick also dismissed offers by Turner to accept “baseball-style” arbitration—a negotiation tool often requested by pay TV operators during impasses with programmers—should the deal be approved. 

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That offer didn’t extend to Time Warner’s HBO, noted Fenwick, who said Cox didn’t take it too seriously. 

“We didn’t think [the offer] was something real that we could respond to,” she said.

According to the Washington Post, however, Fenwick’s credibility was vigorously attacked under cross-examination by Daniel Petrocelli, attorney for AT&T and Time Warner. For example, Fenwick was unable to answer how many top-ranked shows are produced by TBS, despite listing the Turner network as having “must-have” content. 

Petrocelli’s hardest hit came when he pinned Fenwick for not researching an estimate on how many subscribers Cox might lose if it couldn’t come to terms with Turner (thus the “large number” estimate).

"You think you can just come in here and give your opinion … and you've never done a single bit of quantitative analysis?" Petrocelli told Fenwick.

Fenwick responded, “Sure,” and that her larger point is that the deal would change leverage for Cox in negotiations.

Petrocelli’s grilling of Fenwick followed an admonition by Judge Richard Leon, who warned lawyers on both sides to make sure their expert witnesses could back up testimony with solid research and data. 

The trial will resume on Monday, with Warren Schlichting, executive VP of programming, marketing and media sales for Dish Network, set to testify, along with John Martin, the chairman and CEO of Turner, scheduled to testify.