Published: Thu, November 09, 2017
Finance | By Loren Pratt

US, AT&T estranged over CNN in Time Warner allocation

US, AT&T estranged over CNN in Time Warner allocation

The New York Times reported on Wednesday that the Justice Department pushed AT&T at a Monday meeting to consider selling Turner Broadcasting, the collection of cable channels owned by Time Warner that includes CNN, as a possible requirement to approve the deal.

AT&T chairman and CEO Randall Stephenson, responding Wednesday to reporting on the company's conversations with the Justice Department, denied that an offer to sell came from him.

"The Financial Times reports: "'Its all about CNN, ' said one person with direct knowledge of the talks between the company and the DOJ, adding that the regulator made it clear to AT&T that if it sold CNN the deal would go through".

The two men discussed divestitures that might satisfy the government's concerns. Delrahim voiced tentative support for the deal prior to his nomination, but is said to be looking at it more closely now that he is in office. Transactions like Comcast's acquisition of NBCUniversal in 2011 are routinely approved with conditions attached.

AT&T offered to sell CNN, the sources said. The U.S. President, Donald Trump was one of the merger's fiercest objectors.

"As an example of the power structure I'm fighting, AT&T is buying Time Warner and thus CNN", Trump said a year ago, in a clip aired Thursday morning by MSNBC.

The host argued that Trump's frequently public comments against CNN, or his "obsession" as he puts it, would be noteworthy to a judge should the DOJ block the merger.

AT&T agreed to buy Time Warner for $85.5 billion in October 2016.

To make matters more complicated, today DOJ sources apparently told Fox News that it was AT&T who offered to divest CNN, but that the DOJ rejected this offer.

Reports that the Justice Department is pushing for significant asset sales and conflicting reports of its discussions with AT&T cast new doubt on the deal on Wednesday. But Stephens did change the narrative somewhat, altering AT&T continued assurances that the deal would close before year's end to now account for uncertainty around the timeframe for finalizing the transaction.

But she also said its review should be free from White House influence.

In an emailed statement, the Justice Department said that it "is committed to carrying out its duties in accordance with the laws and the facts".

"We are in active discussions with the DOJ", John Stephens, AT&T's chief financial officer, said at a Wells Fargo investors conference Wednesday. "Beyond that, the department does not comment on any pending investigation".

On last Sunday's Reliable Sources on CNN, counselor to the president Kellyanne Conway said "we're not going to interfere with that here".

The New York Times reports that executives at AT&T and Time Warner are bewildered at the request because the proposed deal is a vertical merger.

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