In a historic move that is sure to have huge repercussions on the entertainment world, U.S. District Court Judge Richard Leon has ruled in favor of the $80 billion AT&T/Time Warner merger. Previously, the U.S. Department of Justice had filed a lawsuit to block this deal, believing it would create a monopoly and negatively impact consumers. Not only did Judge Leon rule to allow the acquisition, but he imposed no conditions.
The Justice Department argued that should this buyout go through, American consumers would have to spend “hundreds of millions of dollars” for more in-demand programming. The example given was NCAA Men’s Basketball. (Because, woo hoo sports!) Because AT&T owns DirecTV, there was speculation that Time Warner (Warner Bros., HBO and the Turner networks TBS, TNT, CNN) would withhold their product from competitors or charge a higher premium to various cable and satellite providers and that AT&T would slow the growing MPVD market, in other words, “digitally distributed live programming ‘skinny bundles’.” For its part, AT&T submitted a plan to utilize a third-party arbitrator should outside licensees have issues with the licensing fees and offerings regarding the Time Warner properties.
This case received extra focus because President Donald Trump… well, we all know the expression “fake news,” don’t we? Not only does Trump have an issue with CNN, but he openly remarked with skepticism regarding this buyout.
Following the judge’s ruling, AT&T issued this statement:
“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. We thank the Court for its thorough and timely examination of the evidence, and we compliment our colleagues at the Department of Justice on their dedicated representation of the government. We look forward to closing the merger on or before June 20 so we can begin to give consumers video entertainment that is more affordable, mobile, and innovative.”
Here comes the juicy part. Now that the judge ruled pretty much 100% in favor of AT&T, be prepared for Comcast to make a huge bid to buy 21st Century Fox out from under Disney. The company has already stated that should the AT&T/Time Warner deal go through, that Comcast would make a $60 billion all-cash bid to acquire Fox. Disney’s plan was to but the company for $52.4 billion in stocks. Not only would Comcast’s offer be for more money, but an all-cash bid may be more enticing than stocks which could take a plunge after such a large pay out.
Fox shareholders are convening in Manhattan on July 10 to vote whether or not they will accept Disney’s offer but now that the door is open for Comcast to enter the equation, there may be an old fashioned bidding war over this property.
Stay tuned for details.
Source: The Hollywood Reporter