The Communications Workers of America is urging all states' attorneys general not to sign onto DOJ's lawsuit seeking to block AT&T buying Time Warner (see 1711200064). The union on Saturday tweeted that President Chris Shelton was in the process of reaching out to them. CWA told us Monday it expects to talk with all of them within the next several days. In a letter from the union to the AGs dated Nov. 22, Shelton chalked up the DOJ litigation to political interference from the Trump White House due to the administration's CNN enmity. Justice didn't comment Monday.
Arris completed its $800 million cash buy of Ruckus, it said Friday. Arris said Ruckus will operate as Ruckus Networks, preserving "the much-respected Ruckus brand," part of the Arris enterprise networks business segment. The deal was announced in February.
Discovery Communications is increasing its piece of the OWN: Oprah Winfrey Network joint venture with Winfrey's Harpo, the programmer said Monday. Discovery said it's paying $70 million for an additional 24.5 percent, which would give it more than 70 percent. It said Winfrey will remain CEO, with her exclusivity commitment to the network extended through 2025.
Reports DOJ will require Sinclair to spin off very few stations in its acquisition of Tribune were met with scorn by former FCC Commissioner Mike Copps Thursday. “Lipstick on a pig! No conditions can make this work,” tweeted Copps, with transaction opponent Common Cause. The New York Post reported Wednesday night Sinclair is nearing an agreement with DOJ that would require divestiture of 13 stations. The parties didn't comment.
The assumption that pricing in a four-player wireless market will be lower than in a three-player one is likely incorrect, at least in the short term, MoffettNathanson analyst Craig Moffett wrote investors Monday. Without distraction of possible mergers, companies could focus more on profitability than on customer counts, he said. Moffett said Sprint clearly was hurt by dissolution of Sprint/T-Mobile talks, but the other three principal carriers could benefit if that company adopts a less promotional pricing posture as it tries to tackle debt service and network reinvestment. He said a four-player market is also good for Comcast and Charter Communications since it "creates a more hospitable dynamic" for their Verizon mobile virtual network operations.
DOJ's case against AT&T's buy of Time Warner is backed by only speculation and out-of-context statements, telecom consultant Jonathan Lee blogged Monday. He said the case (see 1711210005) has numerous "unsupported" assumptions that New AT&T could profitably raise TW programming prices; that blackouts are always worse for MVPDs than for programmers; that New AT&T will be well insulated from the threat of a rival MVPD not carrying TW content because it would pick up some defecting customers; and that New AT&T could profitably charge its own retail customers more.
Meredith agreed to buy Time Inc. in a $2.8 billion deal expected to close in Q1, with $650 million in funding from Koch Equity Development, Meredith announced Sunday. The takeover "accelerates Meredith's digital position," Meredith noted, saying its TV stations see a "strong political advertising year in fiscal 2019."
Vertical mergers are nearly always pro-competitive and pro-consumer, result in lower consumer pricing or better products, and no loss of competitors in the market, R Street blogged Wednesday, calling DOJ's case against AT&T's buy of Time Warner (see 1711200064) "weak." It said negotiations about merger conditions likely will continue in coming weeks. A "targeted" behavioral condition covering the licensing of TW content to competing online video distributors like Sling TV "may be enough to grease the wheels and get this merger over the line," it said, but it's not clear if AT&T would accept such conditions or try to get court approval of the buy without any conditions. Many antitrust experts said the DOJ doesn't face easy success (see 1711210005). DOJ has a strong case, given the growing bipartisan view that behavioral conditions are problematic, Cleveland State University law professor Chris Sagers blogged Tuesday. Federal agencies frequently put conditions on vertical mergers, he said, saying the size of the deal -- one of the largest in history -- is also important. It could help the DOJ that the case has been assigned to U.S. District Judge Richard Leon, whose opinion in the Tunney Act proceedings in the Comcast/NBCUniversal merger (see 1109020106) "was modestly strongly worded," and who ordered the government's requested relief "be toughened up in a few respects." Separately, Technology Policy Institute President Emeritus Thomas Lenard, in a column Wednesday in RealClearPolicy, said AT&T likely went into the TW deal thinking it could negotiate conditions similar to those put on Comcast/NBCUniversal. But the antitrust division, with its suit, is making clear it doesn't favor such conditions in AT&T/TW, Lenard said. Divestitures have costs, such as destroying some of the value and efficiencies the parties hoped to get from the deal, plus their disruption, he said, saying the facts of the case will determine whether structural or behavioral remedies are best. In a tweet Tuesday, telecom consultant Jonathan Lee waved off the DOJ's argument that TW-owned sports content like NBA, MLB and NCAA games are must-have content, citing Charter Communications and SportsNet LA and its challenges getting carriage on MVPDs. The DOJ complaint ignores the travails the legacy media sector faces from cord cutting to ad dollars shifting online and the hope M&A represented, BTIG Research Analyst Rich Greenfield wrote Wednesday. He also said DOJ arguments Turner content is must-have is questionable. And he said it was surprising the complaint didn't have clear examples of Comcast/NBCU consent decree failures or the economic harms inflicted on consumers, since DOJ presumably will need to show that deal hurt competitors and consumers and that the larger AT&T/TW deal carries larger potential hurts.
Any DOJ condition of sale of some Time Warner channels in AT&T buying TW would be "unprecedented" for a vertical merger, wrote Free State Foundation President Randolph May and Fellow Theodore Bolema in an opinion piece in The Hill Friday. "It will have a challenge in court explaining why this case deviates from antitrust enforcement precedent in which, at most, behavioral conditions were sufficient." BTIG analyst Rich Greenfield said it's "nearly impossible" to imagine Comcast getting regulatory OK for significant content or distribution acquisitions under this administration, and if DOJ sues to block AT&T/TW or forces a divestiture of Turner or DirecTV, "it is not far-fetched" to think an attempted government breakup of Comcast/NBCUniversal could come. He pooh-poohed Comcast/NBCUniversal buying Fox but envisioned a Comcast split if vertical integration is a legal issue, with the result being two public companies: Comcast and Sky holdings on one side, NBCU and Fox on the other. Event Driven reported DOJ antitrust chief Makan Delrahim (see 1711160056) said he's “absolutely” confident in his team if AT&T/TW is litigated and the agency will decide how to proceed "in due course." AT&T hired a lawyer to help in that potential effort (see the personals section of this issue of this publication.)
Broadcom completed its buy of Brocade Communications Systems, the acquirer announced Friday, along with an executive move (see the personals section of this issue of this publication). In August, the FTC 2-0 approved the deal worth about $5.9 billion on condition Broadcom prevents release of its partner Cisco's confidential business information (see 1708170052 and 1707030030).