The Time Warner/AT&T vs US Justice Department trial is still going on. The Justice Department is suing to block the merger between the two, but today, Time Warner’s CEO stated that it needs the merger to be approved so that it can better compete with the advertising giants of Facebook and Google. Those are the two largest advertisers out there right now, with Google having ads on a number of sites, including its own, and then Facebook having ads on its website – which is one of the most visited sites in the world.
Time Warner’s CEO, Jeff Bewkes said that the Justice Department was wrong, in saying that this merger would push for blackouts when negotiating with pay TV operators. That is the number one concern for the Justice Department, as it would give AT&T the content and the service to distribute it, which would allow AT&T to drive up the price for its competitors like Comcast and Verizon. Bewkes told the judge that he thinks “it’s ridiculous”. Continuing by stating that if Time Warner’s channels are not in distribution, the company loses “lots of money” from advertising and subscriptions. Arguing that it would be in Time Warner’s best interest to license out its content, even if it was owned by AT&T. Bewkes said that it would be less than two-percent of subscribers who would drop pay TV over a blackout anyways, so that shouldn’t be an issue. Meanwhile, the Justice Department says it’ll be closer to 12-percent.
This merger between AT&T and Time Warner was announced back in October of 2016, and is estimated at about $84.5 billion. It has been one of the longer deals to complete, and that’s because the Justice Department is looking to block it. It’s not quite clear whether the Justice Department will be successful in blocking it or not, but the trial should be ending in the next week or two, with a decision from Judge Leon. AT&T is pushing for this deal so that it has more content in its pocket, but also to compete with the likes of Netflix and Amazon who are pumping out a ton of original content.