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Trump Said to Tell Confidant He Remains Opposed to AT&T Deal

Gerry Smith and Joshua Green

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onald Trump remains opposed to the megamerger between AT&T Inc. and Time Warner Inc. because he believes it would concentrate too much power in the media industry, according to people close to the president-elect, who has been publicly silent about the transaction for months.

Trump told a friend in the last few weeks that he still considers the merger to be a bad deal, said one of the people, who asked not to be identified because the conversation was private. Trump’s chief strategist, Steve Bannon, is also opposed to the deal, another person said.

While Trump blasted the deal during the campaign, Time Warner shares have climbed 10 percent since the election on speculation that a Republican administration would be friendlier to the $85.4 billion merger. The stock closed Wednesday at $96.71, compared with AT&T’s offer price of $107.50 a share.

Time Warner shares dropped as much as 3.8 percent Thursday after Bloomberg’s report on Trump’s thinking about the transaction.


Hope Hicks, a spokeswoman for Trump, didn’t respond to a request for comment. AT&T declined to comment, and Time Warner didn’t respond.

Trump’s opposition to the deal is “mildly negative,” but everything is negotiable with the president-elect, Cowen & Co. analyst Paul Gallant said Thursday in a note to clients. The review process is still in the very early stages, he said.

Limited Options

It remains unclear whether Trump would try to influence the regulatory review of the merger, either by pushing officials to impose conditions or to block the deal entirely. The transaction, which would combine the biggest U.S. pay-TV and internet provider with one of the largest creators of TV programming, will be reviewed by the Justice Department and possibly by the Federal Communications Commission.

Trump, who takes office Jan. 20, has nominated Senator Jeff Sessions, an Alabama Republican, to lead the Justice Department, and hasn’t named a successor to departing FCC Chairman Tom Wheeler.

In October, before the election, Trump said his administration wouldn’t approve the merger, saying, “It’s too much concentration of power in the hands of too few.” He cited the deal as “an example of the power structure I’m fighting.”

Trump has said little publicly about the deal since, but has taken on several major corporations in recent weeks after winning the election, including Ford Motor Co., Carrier and Boeing Co.


If Trump wants to influence the review, he would have more success with the FCC, which weighs deals based on a more subjective public-interest standard, said Craig Moffett, an analyst at MoffettNathanson. In 2014, for instance, President Obama issued a statement and video urging the commission to impose stronger regulations on high-speed Internet service to protect “net neutrality,” which the agency later did.

“If the FCC takes the case, President Trump could influence the decision in any number of ways,” Moffett said. “He can effectively turn up the heat and make it very difficult for the FCC to disagree with him.”

AT&T, however, could avoid a FCC review by divesting licenses owned by Time Warner, Moffett said.

Trump would have a harder time influencing the Justice Department review of the deal, because any decision the agency makes can be challenged in court, Moffett said.

“It would be naive to say DOJ operates utterly without political intervention,” he said, “but the potential for partisan meddling is much lower at DOJ than at FCC.”


Trump’s opinion is unlikely to lead to the merger being blocked unless the president chooses to get heavily involved in the approval process, said Barry Diller, a media veteran who’s now chairman of IAC/InterActiveCorp.

“Unless he’s going to micromanage and now he’s going to be head of antitrust and go through the whole legal process, he’s just doing what he does,” Diller said in an interview Thursday on Bloomberg Television.

CNN Frustration

Trump’s opposition to the AT&T-Time Warner deal stems partly from his frustration with CNN, which is owned by Time Warner, one of the people said. Trump has repeatedly criticized the cable news network for what he sees as unfair coverage of him.

AT&T could sell CNN to appease Trump and get the deal approved, Moffett said.

“If that’s the primary concern, you’d have to wonder whether AT&T wouldn’t prefer to sell CNN for Trump to claim victory and still get this deal across the finish line,” Moffett said.

Trump is also frustrated with Comcast Corp., which in 2011 bought NBCUniversal in a similar deal that was cleared with conditions. Trump is upset with Comcast and NBC because he sees them as being responsible for the October leak of a 2005 “Access Hollywood” video in which he made degrading comments about women, the person said. Trump sees himself as a victim of a concentrated media landscape, the person said.


In the coming months, federal regulators will scrutinize the deal, which would create a telecommunications and media empire that will own much of the programming it provides to subscribers of its wireless, internet and pay-TV services. AT&T serves 133 million U.S. wireless customers and 25 million video subscribers.

During a congressional hearing last month, the chief executives of AT&T and Time Warner defended their transaction, arguing that it would raise a challenge to cable companies by making it easier to create new online TV packages and help them compete with tech giants in online advertising, among other benefits.

That same month, AT&T Chief Executive Officer Randall Stephenson said at an investor conference that the regulatory review of the deal “should be fairly straightforward” and “based on the facts of the law, we expect a good outcome from that.”

He said AT&T was open to conditions to get the deal approved but said “it’s too early to tell” whether AT&T would divest Time Warner’s licenses to avoid an FCC review.