Reported pressure on CNN in Time Warner merger raises retaliation fears

Reported pressure on CNN in Time Warner merger raises retaliation fears
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A public spat between the Justice Department and AT&T has prompted critics to question whether the White House is trying to use the company’s proposed $85 billion merger with Time Warner to retaliate against CNN over its coverage of President Trump.

Several news outlets reported Wednesday that the Justice Department told AT&T that it would need to sell off CNN or its parent company, Turner Broadcasting, in order for the merger to be approved.

Sources at the Justice Department disputed those reports, telling The Hill and other outlets that it was AT&T that had offered to sell CNN in order to get regulators to sign off on the deal. Justice officials rejected the offer as insufficient, according to this account.

Still, the reports of Justice pressure on CNN over its reporting raised concerns about politics entering the antitrust process.

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“If this were any normal president, we wouldn't even being talking about this, which is whether the DOJ is serving as an instrument of a president who's trying to inflict a political vendetta,” said Hal Singer, a fellow at George Washington University's Institute of Public Policy.

AT&T CEO Randall Stephenson flatly denied the stories on Thursday, saying that he is refusing to even entertain the notion of selling CNN, which he believes is vital for his company to be able to compete for advertising dollars.

"First and foremost, irrespective of what you read yesterday, I have never been told that the price of getting the deal done was selling CNN. Period. And likewise, I have never offered to sell CNN,” Stephenson said at the New York Times’s Dealbook Conference.

“So take those two off the table,” he said.

The spat has renewed concerns among some critics who worry that Trump is seeking to intervene in the $85 billion deal to retaliate against CNN, an outlet he has frequently criticized.

"We want to make sure that's not what's dictating these decisions," Sen. Amy KlobucharAmy Jean KlobucharFranken resignation could upend Minnesota races Avalanche of Democratic senators say Franken should resign Trump-free Kennedy Center Honors avoids politics MORE (D-Minn.) told The Hill on Thursday.

Spokesmen for AT&T, the White House and the Department of Justice all declined to comment for this article, but they have all denied that President Trump is involving himself in the merger discussion.

Still, that’s not reassuring enough for Democrats who don’t trust the president to stay out of the Justice Department’s proceedings. Many are pointing to reports that emerged Friday that Rupert Murdoch, the Fox News owner and Trump ally, has been waging an aggressive battle to try to buy CNN.

Klobuchar, the top Democrat on the Senate Judiciary antitrust subcommittee, and other Democrats have spoken out against the merger for its potential to hurt consumers.

Critics argue that a combined AT&T-Time Warner company would be able to give preferential treatment to its own programming while discriminating against that of its competitors.

Still, many opponents of the deal are also concerned that the White House may be influencing the Justice Department’s negotiations. Klobuchar and other Senate Democrats sent letters to the White House and Justice Department on Friday demanding answers on the president’s involvement in the discussions.

“The President’s views about the content of CNN’s press coverage have no place in antitrust law enforcement,” the senators wrote.

“Should the Antitrust Division determine that AT&T’s acquisition of CNN — as well as other Time Warner properties — raises antitrust concerns, Department enforcement action may be warranted. But political considerations based on the content of CNN’s news coverage should never impact the Department’s decision-making,” they wrote.

Trump vowed to block the deal on the campaign trail last year, saying that it would result in “too much concentration of power in the hands of too few."

He appeared to soften his stance after the election, and his administration’s position on the merger had been the subject of speculation as he took office. But nothing indicated that the deal was in trouble until this week.

“It just seems like this threw a wrench in a process that was going along without a lot of controversy for some period of time,” said John Culver, an analyst with Fitch Ratings.

The two sides seem poised to take their fight to court. Last week, The Wall Street Journal reported that the Justice Department was preparing a lawsuit to block the transaction in the event that negotiations fell apart. And Stephenson said Thursday AT&T is ready to fight any legal action in order to retain Time Warner’s media holdings.

Though the deal’s critics say there is good reason to want the combined company to sell off CNN, some think that the president’s record of comments about the media will make it hard for prosecutors to make that case in court.

“Given that Trump has gone on record calling for the revocation of NBC's broadcast license, calling CNN 'fake news,' I think it's a real issue,” Singer said.