The Department of Justice is demanding that AT&T sell CNN as a condition of its pending $85 billion acquisition of Time Warner according to several reports.
Anonymous sources relayed the deal to the Financial Times, the New York Times, and Politico, although the reports differ in whether the DOJ asked AT&T to sell Turner Broadcasting, which includes CNN, or CNN or DirectTV. All the stories published nearly simultaneously on Wednesday afternoon. The FT’s source said the Justice Department’s decision was “all about CNN,” which, President Donald Trump has frequently labeled “fake news.”
There’s no doubt that this is a big acquisition — and enormous media deals come under close scrutiny, both by media and antitrust regulators. But this one has already passed regulatory muster in a number of other countries and was expected to sail through the process in the U.S., particularly under a Republican administration. The head of the Justice Department’s antitrust division even said on Canadian TV last year that the deal didn’t pose a “major antitrust problem.”
In October, both companies seemed to think that the deal would go forward. But on a call with investors Wednesday, AT&T CEO John Stephens said that the closing of the deal wasn’t certain, even though a “vertical mergers” — meaning that the companies merging aren’t in direct competition with one another — “like this hasn’t been blocked for over 40 years,” according to the Financial Times.
Trump had vowed to block the deal on the campaign trail.
“AT&T is buying Time Warner, and thus CNN, a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few,” he said during an October 2016 rally in Gettysburg, PA, according to the Wall St. Journal.
If the Justice Department’s move is politically motivated, it would be a throwback to the 1970s when President Richard Nixon threatened networks with an antitrust suit if they didn’t change their coverage.
UPDATE: The Justice Department claimed that AT&T CEO Randall Stephenson had offered, privately, to sell CNN. Stephenson denies that he ever made that offer.
Editor’s note: This post has been updated to reflect conflicting reports about the DOJ’s request.