AT&T’s long battle to acquire Time Warner has just gotten closer to becoming a closed deal. Today, Judge, Richard Leon ruled that AT&T could purchase Time Warner. This comes after a pretty long court battle – and one that was delayed a few times – and nearly 20 months after AT&T announced its plans to purchase Time Warner. The Justice Department filed this lawsuit back in November to block the merger, arguing that AT&T could raise prices for content that is also licensed out to its competitors. Since Time Warner does own some properties including CNN and HBO, to name a few. But the Judge decided that it was okay for the two to merge.
AT&T wanted to purchase Time Warner to try and diversify its revenues, bringing in revenue from streaming services, rather than relying on wireless revenues and its services like cable TV and Internet services. This is something that many ISPs are now getting into, with Comcast purchasing NBCUniversal a few years ago, and Verizon picking up AOL and Yahoo recently. AT&T also argued in the case that this was a vertical merger, and that there was nothing funny going on here. Mentioning that Time Warner would lose a ton of money and value if AT&T did indeed charge more to competitors like Comcast and Verizon to use its media properties like CNN and HBO. That’s something that obviously made a lot of sense to the Judge here, and likely had an effect on his ruling today. AT&T’s legal team argued that AT&T needed Time Warner to be able to compete with digital giants such as Amazon, Google, Facebook, Netflix and YouTube, all of which are massive companies now – with larger market caps than AT&T.
With the case over with, AT&T and Time Warner are able to move onto the next phase of the merger. While the two companies did give themselves a deadline of June 21 to complete this merger, it may not be finished by then. This is because Judge Leon’s opinion could be taken over to the Court of Appeals in Washington DC for further review. Of course, AT&T and Time Warner weren’t the only ones waiting to see what the ruling was here. Comcast, and Disney have been in a bidding war for 21st Century Fox, and with the ruling in favor of AT&T, Comcast is likely to up its bid for 21st Century Fox. Of course, this also means that the likelihood of T-Mobile and Sprint’s merger being approved is greatly improved as well. This ruling is a big deal for the future of merger and acquisitions under Trump’s Justice Department.