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Phantom Roxas

Media conglomerates and mergers

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This is a fairly long article, but I highly encourage giving it a read, since the AT&T-Time Warner merger will remain the primary subject of this thread until we reach a resolution from the trial. https://seekingalpha.com/article/4152733-t-david-vs-goliath

 

I will note that Quad 7 Capital has investments in AT&T - which they mention in the article - so keep in mind there may be some bias in the analysis, but they do well to consider the possibilities.

 

The conclusion they draw is that AT&T will buy Time Warner, and the worst-case scenario is that they may need to sell of certain assets, such as AT&T selling DirecTV or Time Warner selling Turner Broadcasting. It's a far more generous possibility than the merger failing completely, and Time Warner splitting up.

 

Personally, while I'd be interested in what may happen if Time Warner were to break up, the merger is primarily about how powerful AT&T is. Whether this merger succeeds or fails, I would like AT&T to make concessions.

 

Turner Broadcasting CEO John Martin openly disparaged DirecTV and DirecTV Now last month. https://www.nbcnews.com/tech/tech-news/turner-chief-john-martin-justice-department-clueless-about-t-time-n847821

 

His most damning criticism is that DirecTV Now makes no money from it's subscribers, which is bad for business.

 

AT&T is also planning to make a public offering for DirecTV Latin America. https://www.cnbc.com/2018/02/07/reuters-america-att-exploring-ipo-of-directv-latin-america-stake.html

 

While it's selling a specific division of DirecTV rather than the entire division, this seems to at least offer some steps towards AT&T downsizing, and focusing on their business.

 

Though... with Time Warner's name losing half of it's meaning, I think what I would want is for Time Warner to be restructured and consolidated. Elevate Warner Bros. as the "main" company, and Turner Broadcasting and HBO are reorganized to be subsidiaries of Warner Bros. You keep the same three companies, but clearly emphasize Warner Bros.

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So, after the attempt to obtain records of potential communications between the White House and the Department of Justice on potential interference in AT&T-Time Warner merger, a group called the Protect Democracy Project is suing for similar records, this time regarding the Disney-Fox deal.

 

https://www.reuters.com/article/us-fox-m-a-disney-justice/lawsuit-seeks-white-house-justice-department-records-on-fox-disney-deal-idUSKBN1GH3DP

 

The key difference is how these suits regard the current administration's role the trial. The belief was that Trump was unfairly obstructing the AT&T-Time Warner merger due to his bias against CNN, while the theory in this case was that he may be too lax on the Disney-Fox deal, as he may be seeking to aid a political ally in Rupert Murdoch.

 

Regardless of whether or not this particular suit is successful, especially since AT&T's own attempt was blocked, we're still in a position where I can't see much progress on the Disney-Fox deal until after the AT&T-Time Warner merger trial concludes. Disney and Fox also seem to be waiting until then, since the expectation is that their merger will likely be judged based on how AT&T and Time Warner turn out. Between this suit and the Sky bidding war, it seems like we are seeing developments around the deal, but still nothing solid.

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We have ten days until the merger trial begins, not accounting for the potential delay.

 

Former DOJ officials request an inquiry into Trump's possible interference in the lawsuit.

 

http://variety.com/2018/politics/news/trump-interference-att-time-warner-antitrust-suit-cnn-1202722588/

 

Although Richard Leon blocked AT&T from obtaining records, the issue remains that there's still the appearance of such potential interference. While I don't believe that the interference was on the level that they claim it was - although the motive is certainly believable - this is the elephant in the room, and it needs to be definitively proven whether or not there was such an interference.

 

Frankly I think there is a lot more to talk about, and all parties involved have presented their own cases outside of this potential interference. I hope for this particular aspect to be resolved so that the rest of the trial can continue accordingly.

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Looks like the final briefs have been submitted for the AT&T-Time Warner merger trial. Of note, it also seems that AT&T is no longer pursuing the point about potential interference of political bias.

 

http://money.cnn.com/2018/03/09/media/att-time-warner-lawsuit/index.html

 

The trial begins a week from tomorrow, and will last until some time in April.

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Richard Leon rejects the DOJ's request to exclude a commitment from the AT&T-Time Warner trial, meaning that AT&T and Time Warner could agree that they would not withhold channels or raise prices.

 

https://www.reuters.com/article/us-time-warner-m-a-at-t/judge-rejects-u-s-demand-to-exclude-att-argument-in-time-warner-merger-trial-idUSKCN1GP2GN

http://variety.com/2018/biz/news/att-time-warner-antitrust-trial-arbitration-offer-1202725268/

 

So far Richard Leon seems to be approaching this with an even hand.

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The AT&T-Time Warner merger trial will be delayed two days due to scheduling issues.

 

https://www.reuters.com/article/time-warner-ma-att/att-time-warner-merger-trial-to-be-delayed-two-days-source-idINL1N1QX1JM

 

Which means the trial begins in six weeks, unless another issue comes up.

 

I've been leaning more towards this merger blocking, primarily because while AT&T will mostly likely remain unscathed - although it would still be closer to a monopoly - I do want Time Warner to break up, and in particular, if merger such as Disney buying Fox are hinging on the outcome of this trial, then this could be damaging to that merger as well.

 

I'm not so sure about HBO or Turner, but Warner Bros. stands to be a big loser from this. Ready Player One is shaping up to be both their biggest movie of this month, as well as their biggest failure this month. Between the potential blows from Ready Player One bombing, or at least falling short of expectations, as well as this merger being blocked, then if blocking this merger means Time Warner may split up, I can't imagine any of the individual companies thriving on their own. Even if they could, I think the failure of the merger and potential split of Time Warner would be seen as weakening those three, and potential buyers of the divided assets would be vultures picking up what's left.

 

That said, I would not be against any of the individual companies subsequently being bought out by other companies, though it would then come down to who is buying what.


http://variety.com/2018/politics/news/att-time-warner-antitrust-trial-6-8-weeks-1202728048/

 

Turns out the trial will start on Monday, it's just that the first two days will be focused on objections to exhibits. The trial will last for 6-8 weeks rather than the previously estimated 6-8 weeks, which means this could last until at least May.

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This is when mergers start to get too crazy. If companies are allowed to build near-monopolies, anything could happen...

 

And with an industry as important as the film industry...

 

All of the creativity and risk would be sucked out of it. The theater would be a boring place.

 

When companies get too big, this is when the govt has to put their foot down and say, "No, this is preventing a free market, we're gonna say no."

 

Of course, this may sound naïve coming from me, especially given the posts I made in General that didn't get locked, but that's just my $0.02.

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I'll have to look more into detail, but in particular, a major issue with theaters decades ago was that film studios owned theater chains. That's since been prevented, though now it seems that converse is true, such as National Amusements being a majority owner of CBS and Viacom.

 

It's why I'm really worried about Disney owning Fox. They each have their own subsidiaries, but it's a case where the film studios are own by even bigger companies already, so the film industry, while sizable in its own right, seems to be "secondary" in the eyes of these conglomerates. I can't recall the last time Disney has ever used Touchstone, and while I could see Fox serving as a "replacement" of sorts for Touchstone, it's possible that Disney owning Fox could simply cause certain divisions of Fox to halt as well.

 

The AT&T-Time Warner merger trial finally begins tomorrow. I do want to keep this thread going even after that trial is resolved, but this is absolutely what the companies that would be discussed in this thread are hinging on.

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The AT&T-Time Warner merger trial has at long last begun. http://variety.com/2018/politics/news/att-time-warner-merger-1202729935/

 

As stated before, today and tomorrow will be focusing on evidentiary objections. While this could mean this is more of a preliminary stage, we'll have to see how this trial will progress on Wednesday.

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https://www.reuters.com/article/us-time-warner-m-a-at-t/judge-weighs-what-evidence-u-s-can-use-to-block-att-time-warner-merger-idUSKBN1GV22A
 
I do want to be clear about something. Some of these articles lately - and likely, some of the ones I will be posting in the foreseeable future - will mention whether or not Trump's disdain for CNN is a factor in this trial. While I believe that Trump personally opposes the merger because of CNN - he has at least stated in the past that he opposes the merger, though I don't believe he's ever mentioned CNN as a factor for his opinion - I don't believe he is acting on that here. Some logs of communications between the DOJ and the White House were presented, and Richard Leon blocked AT&T from seeing more of the logs, with the decision that the communications offer nothing suggesting that there is a political bias here. Since then, AT&T seems to have dropped any pursuit of proving such a bias, so I believe that the idea that "The DOJ blocked this because Trump hates CNN" is no longer a factor.
 
Any mentions of that potential influence seem to be mentioning the overall progression of the pre-trial discussions and hearings. However, neither the DOJ or AT&T seem interested in discussing Trump's role. If he comes up during the trial - and given the anticipated length of this trial, that is certainly possible - but for now, I would say that if anyone is reading this thread, I wouldn't exactly be betting the results of this trial on whether or not Trump had any influence, or how Richard Leon may view Trump.
 
As far as CNN is concerned, I believe the network is being viewed not on its own, but as a part of Turner Broadcasting. In that sense, I would direct to this article.
 
https://www.reuters.com/article/us-time-warner-m-a-at-t/judge-weighs-what-evidence-u-s-can-use-to-block-att-time-warner-merger-idUSKBN1GV22A
 
Two main points here.
 
1. The article mentions that the DOJ suggested that AT&T should either divest DirecTV, or exclude Turner Broadcasting from the deal. This has come up a while ago, but AT&T rejected that particular proposal, and it seems that it came up again. This is something that I would expect to continue being a possibility here, but regarding CNN, I believe that comes down to what happens to Turner Broadcasting as a whole, rather than anyone specifically targeting CNN.
 
2. The DOJ's main argument now hinges on the possibility of AT&T unfairly raising prices, and one of AT&T's lawyers, Daniel Petrocelli, requested for some of the DOJ's evidence on that point to be rejected, but it seems that the DOJ is standing by that argument.
 
http://www.latimes.com/business/la-fi-ct-att-doj-trial-20180319-story.html
 
Richard Leon has also stated that he would allow more witness testimonies if necessary, due to the importance of this trial.
 
Continuing with Petrocelli, he disagreed with the use of emails from AT&T employees, arguing that it offers too broad of a view. Some of the evidence is being contested as essentially being irrelevant to this trial, while AT&T has seemingly declared a lot of their documents to be "confidential", raising concerns over whether such documents should be revealed in open court, or if the court should briefly be closed to the public to allow the release of that confidential information, although Leon opposed the latter suggestion.
 
http://variety.com/2018/politics/news/att-time-warner-merger-1202729935/
 
The DOJ could attempt to trap AT&T with their own words, quoting AT&T as having said “have the incentive and ability to use (and indeed have used whenever and wherever they can) that control as a weapon to hinder competition.” They also use a DirecTV quote that expressed similar concerns, though the main challenge against using that quote was that it was written prior to when DirecTV was itself acquired by AT&T.

 

While I believe the DOJ could make strong arguments, I also worry that they - and to be fair, AT&T or Time Warner as well - could rely on a gish gallop, focusing more on overwhelming this case by simply providing an excessive amount of evidence, albeit without much regard for whether or not they're truly relevant or could make a coherent case against the merger. Which thankfully makes these first two days of the trial all the more necessary, to determine whether or not much of this evidence is truly relevant.

 

Personally, I would rather this trial reach a conclusion early within the projected timeframe, because the current deadline for the merge is June 21st, which begs the question of whether or not AT&T and/or Time Warner would agree to delay the deadline a third time. With these evidentiary objections, I believe that should make it feasible to have this trial end sooner rather than later. There is still be evidence to be either admitted or rejected tomorrow before the opening statements can properly begin on Wednesday.

 

Regarding the previous rumor that, if this trial were to result in the merger being blocked, and as a consequence, Time Warner would break up and sell off its three primary divisions, I've forgotten that, since the source of that rumor is Umberto Gonzalez, that's a rumor that should be taken with a massive grain of salt, as Gonzalez is a highly unreliable source. While a possible breakup of Time Warner is a possibility that I do not wish to rule out, the legitimacy of the claim is dubious at best, so for now, let's assume that Time Warner could survive regardless of the decision made in this trial.

Edited by Phantom Roxas

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A lot of articles mentioned some of the same information, so I wanted to limit it to just a couple.

 

http://money.cnn.com/2018/03/20/media/att-doj-trial-delayed/index.html

http://variety.com/2018/politics/news/att-time-warner-antitrust-moved-snowstorm-1202731784/

 

The opening statements in the AT&T trial will be delayed until tomorrow, due to a snowstorm prompting the court to be closed for today.

 

Given that the primary argument against AT&T is that buying Time Warner could reduce competition, they have pointed to FAANG (A collective term referring to Facebook, Apple, Amazon, Netflix, and Google) as tech giants, and argued that Time Warner's content needs to stay relevant alongside FAANG, so rather that reducing competition, they argue that they would be adding to the competition.

 

However, the Justice Department's lead litigator, Craig Conrath, challenged that notion, saying that consumers pay for satellite, cable, and Netflix, so it's more of a complement, rather than a competitor.

 

With the arguments based around what may happen if the merger succeeds, Richard Leon has suggested that he would probably need a crystal ball if the current trial comes down to who is the best guesser. It's a lot more speculation with not enough hard facts.

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So, I'm not putting too much into this rumor just yet, but supposedly, Apple may buy Sony Entertainment. I should stress that this isn't the entire company, just the umbrella that owns Sony Pictures and Sony Music.

https://www.bleedingcool.com/2018/03/22/rumour-apple-buy-sony/

Does Sony still have rights to Spiderman?

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Does Sony still have rights to Spiderman?

Yes. While Spider-Man: Homecoming was a Marvel Studios film, it was done in collaboration with Sony. Sony is making Into the Spider-Verse and Venom, seemingly as a bid to hold on to the Spider-Man film rights, which is why there is some uncertainty regarding whether or not Peter will appear in the Venom film, although I personally doubt that he will.

 

However, my understanding is that the rights are non-transferrable. I don't quite understand the particulars, but the short of it is that if Sony were to be acquired by another company, Sony's new parent would not inherit the film rights. Rather, it would automatically "force" the rights to revert to Marvel. In other words, if Apple were to buy Sony Entertainment, and therefore Sony Pictures, then Sony would lose Spider-Man to Marvel and Disney.

 

I've touched on this in this thread before, but I should say that, while I'm not certain about Apple specifically being the one to buy Sony, Sony does seem to be vulnerable.

 

 

There's not much to this yet, but I think it's worth bringing up here.

 

Kaz Hirai is stepping down as CEO of Sony Corporation. https://www.theverge.com/2018/2/2/16962934/new-sony-ceo-kenichiro-yoshida-kaz-hirai

 

Sony Pictures has let go three of their top executives in an effort to streamline their business operations. http://variety.com/2018/tv/news/sony-pictures-keith-le-goy-andy-kaplan-sheraton-kalouria-man-jit-singh-1202689087/

 

With major shakeups like these, it begs the question of whether Sony may sell their film division to another company. Current Sony Pictures chairman and CEO, Tony Vinciquerra, believes that Sony Picture needs to get bigger, or else they may be bought out. So, while there are no actual talks of a merger at this stage, it is something I'm going to keep an eye on for this thread.

 

I wouldn't quite call this a potentially hostile takeover, although Vinciquerra's statement does suggest that Sony is preparing for one.

 

Also, for those wondering, I believe PlayStation would not be affected by this, since PlayStation is the focus of Sony Interactive Entertainment, which is a separate division from what would presumably be included in this deal.

 

Personally, I'm a bit surprised Apple isn't pursuing Sony Mobile, though that may be for the best. That would be a horizontal merger, and whether people consider it or not, the AT&T-Time Warner merger is still positioned to be the precedent that these potential mergers will all be based on. Apple buying Sony Mobile would be much like Disney buying 21st Century Fox's assets, running the risk of reducing competition (Though to be honest, Sony Mobile is apparently one of Sony's least profitable divisions, so I think if it were to reduce competition, the consequences would be negligible at best) whereas this is a vertical merger, and one on somewhat a smaller scale than AT&T and Time Warner. While I would say Apple and AT&T are in the same position in their respective industries, Time Warner seems "bigger" than Sony to me.

 

Though I will say that I'm speaking from a place of disdain towards Sony, so make of that what you will. However, while Apple buying Sony Pictures may not be too bad, buying Sony Entertainment means they would also own Sony Music as well, and I believe that is where they might face opposition.

 

It's a little funny, really. Years ago, I entertained the notion that Sony might buy Time Warner, or vice versa. I wasn't really sure which of the two could manage it (I believed an acquisition would have happened rather than flat-out merger), but now it's coming down to them both potentially being bought by other companies. And considering how Apple was singled out by AT&T as one of the companies that needs to be competed with, I imagine that some of the feelings from the Time Warner trial will carry over into what may happen with Sony.

 

I say give this a couple of weeks. That rumor hasn't gained much traction yet, and if this were to happen, it likely wouldn't be until after Kaz Hirai steps down. There has been speculation of Sony Pictures being sold for a while, with the main argument against that being that Kaz Hirai would never allow that to happen. Between Hirai stepping down and the possibility that we do have a solid name for a buyer - although Apple has already dismissed rumors that they may buy Netflix or Disney - next month is going to be interesting.

 

So I guess this begs a question. If Sony Entertainment (So, their movies and their music) were to be sold, would you be happy with it being Apple, or would you prefer a different buyer?

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The AT&T-Time Warner merger trial seems to be going at a steady pace. Since the second week of the trial has come and gone, here are a few stories that stand out.

 

https://www.wsj.com/articles/at-t-time-warner-trials-early-focus-are-turner-channels-must-haves-1522432928

 

Some points from this story:

 

1. Warren Schlichting, who runs Dish's Sling TV (And received transcripts of the opening statements, which he should not have), supported the DOJ's argument that AT&T buying Time Warner could lead to price gouging that would disadvantage rival networks, or even outright blackouts of Turner networks.

 

2. MIT Professor John Hauser conducted a survey that suggested 12% of pay-TV customers would switch a new provider if they suffered a blackout. While this survey could have fit in line with the DOJ's argument, Judge Richard Leon was skeptical over whether the survey was reliable, as some of the respondents of that survey could potentially have answered untruthfully.

 

3. Comcast executive Greg Rigdon claimed to not have the same concerns as Sling TV does, although he admitted that he agreed to raise prices for Turner prices. While Richard Leon's issue with the primary argument of this trial was that he would need a crystal ball if this trial is just going to come down to who is a better guesser, Rigdon's testimony lends credence towards the DOJ's argument. However, he added that he believed the negotiations would have been no different regardless of whether or not AT&T owner Time Warner.

 

Next, Richard Leon cautioned both sides to accelerate the otherwise glacial pace of this trial, as the deadline for the merger is June 21. His final opinion would be roughly 200 pages long, and he would prefer if all parties involved looked at their list of witnesses to determine who they want versus who they really need. http://www.kitv.com/story/37832108/judge-in-doj-case-against-att-and-time-warner-warns-both-sides-to-speed-it-up

 

AT&T lawyer Dan Petrocelli made an unusual argument, which is that Time Warner's content is actually not "must-have content", essentially making the case if a company like Dish did lose subscribers, it actually wouldn't hurt Dish all that much, and that Dish actually cuts networks of its own volition. http://money.cnn.com/2018/03/27/media/att-time-warner-warren-schlichting/index.html

 


While Comcast has attempted to buy part of Sky Broadcasting, Sky has been learning about Comcast's reputation as the "Worst Company in America" http://www.dslreports.com/shownews/Europe-Nervous-About-Comcasts-Bad-Rep-As-Sky-Deal-Looms-141368

 

At the rate things are going, Comcast may have to abandon their Sky bid. https://www.fiercecable.com/cable/will-share-sell-off-force-comcast-to-abandon-sky-bid

 

Comcast is at a "break or point" right now, depending on whether or not AT&T succeeds in buying Time Warner. If AT&T succeeds, it may encourage Comcast to continue pursuing this bid. If AT&T fails, then the DOJ may then seek to place restrictions on Comcast.

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http://variety.com/2018/politics/news/att-time-warner-antitrust-5-1202743869/
 
Richard Leon has asked if arbitration that is both mutually fair and beneficial would alleviate concerns about AT&T owning Time Warner. Charter Communications executive Tom Montemagno seemed accepting of that idea.
 
Since the main argument of the DOJ is that AT&T and Time Warner would have incentive to withhold channels, AT&T and Time Warner's counterarguments revolve around how, while they could do that, it would be a terrible idea and bad for business. The DOJ then tries to prove how that hasn't stopped either company from doing that in the past anyway, without there even being a merger. Since Leon was previously unsatisfied because the arguments seemed to be more about who is a better guesser, establishing precedents is key to the DOJ's argument.
 
Right now, while I understand and agree with the DOJ's concerns, I believe that AT&T and Time Warner are holding their own well here. And the notion of arbitration does seem like a legitimate option, though Montemagno and other executives argued that arbitration should only be a last resort, so they're not quite as eager to settle for that. Regardless of what does happen, the comparisons between the hypothetical AT&T/Time Warner combination and the success of Comcast buying NBCUniversal still raises concerns that the DOJ should probably take another look at Comcast. It also sounds like there's a plan to wrap up this trial by the end of the month. While the deadline for the merger is in June, I believe the ruling and the fallout of that ruling will last for much of next month.
 
In the meantime, AT&T is trying to buy back bonds used to fund this merger now, rather than accrue a greater debt than if they had to pay back later. https://www.bloomberg.com/news/articles/2018-04-05/at-t-plan-to-cut-time-warner-deal-cost-said-to-get-some-pushback
 



Stepping aside to the Disney/Fox merger for the moment, while there are a lot of concerns regarding regulatory approval, the biggest issue is still who will own Sky, and now Disney is offering to buy Sky News directly. Since British authorities are more concerned with Fox, Disney is making this offer so that Sky News would be independent of Fox, and according to Disney, “The divestment of Sky News to Disney is separate from, and not conditional on, Disney’s acquisition of Fox.” As such, think of this as two separate acquisitions being made by Disney. So this goes back to the scenario I described on the last page, and it seems that Fox is stepping aside so that Disney can take the reins in the Sky bidding war. While this makes it a case of Disney vs. Comcast, it doesn't seem to go as far as the idea of Disney and Comcast both fighting over Fox. Just Sky for the moment.

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Apologies if I improperly describe the legal process here, but I will do my best to convey the current state of the DOJ v. AT&T trial.
 
https://www.bloombergquint.com/onweb/2018/04/10/u-s-poised-to-wrap-at-t-merger-case-as-economist-set-to-testify
https://www.wsj.com/livecoverage/att-time-warner-antitrust-case
 
While the Bloomberg article's headline is "U.S. Poised to Wrap AT&T Merger Case", that's a little misleading, as the trial will still be ongoing. To be more accurate, the DOJ will finish presenting their case, as University of California Professor Carl Shapiro will testify how AT&T and Time Warner could raise prices for consumers.

And as the WSJ puts it, "Tomorrow, AT&T will formally begin its defense by calling its expert, University of Chicago economics professor Dennis Carlton."

 

Essentially, this marks the turning point in the trial, with the Department of Justice having gone on the offensive for the majority of the trial thus far, while AT&T and Time Warner will now be going on the defensive. Fittingly enough, as this is the fourth week of the trial, we are halfway through the estimated six to eight weeks. So let's see how long this phase lasts.

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http://deadline.com/2018/04/disney-fox-merger-close-idate-summer-2019-fbc-diet-fox-peter-rice-1202363025/

The Disney/Fox merger is estimated to end in Summer 2019, with management changes at Fox to be announced over the next twelve months to ensure that it will be up and running if the deal does go through.

 

http://variety.com/2018/tv/news/disney-required-to-offer-to-buy-all-sky-shares-if-fox-bid-fails-1202751337/

Continuing with the Sky bidding war, the British Panel of Takeovers and Mergers has mandated that Disney will be required to make an offer for Sky if Fox's own bid to acquire Sky falls through. This is a ruling that Disney, Fox, and Sky all seem to have accepted, as the panel believes that Sky is the primary motivation for Disney for acquiring Fox. In other words, Disney may not be necessarily interested in Fox directly (Though there are certainly incentives for them to acquire Fox), but rather to acquire Fox's stake in Sky by acquiring Fox itself.

 

https://www.hollywoodreporter.com/news/moonves-redstone-inside-poisonous-war-control-cbs-viacom-1101570

There is still some slow progress on a potential CBS-Viacom merger. The current issue is that Viacom believes it has been undervalued by CBS, offering to buy Viacom for $11.9 million, while Viacom suggested the deal should cost $14.6 million. CBS CEO Les Moonves only seems interested in running CBS, and has no interest in acquiring Viacom, so Shari Redstone - whose family owns National Amusements, which owns CBS and Viacom (Hence the incentive to have CBS and Viacom recombine) - may try to oust Moonves from CBS to make a merger more likely.

 

https://www.washingtonpost.com/news/the-switch/wp/2018/04/12/att-is-trying-to-undercut-the-governments-star-witness-in-the-blockbuster-time-warner-trial/?utm_term=.dee8b0284434

Since the Department of Justice presented Carl Shapiro yesterday, AT&T is trying to undermine his argument in particular. As his arguments form the crux of the DOJ's case, dismantling his argument would be key to AT&T's victory. Judge Leon agreed with an assessment that Shapiro's evidence seemed too overly complicated.

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So… I think this might be my favorite testimony, if only for how blunt it is.

 
http://variety.com/2018/politics/news/att-time-warner-trial-john-stankey-1202758157/

“I don’t like Comcast. I’m not going to cooperate with someone I don’t like.”

Since the DOJ believes that AT&T and Time Warner would coordinate with Comcast and NBCUniversal to overwhelm smaller channels, John Stankey - who would be in charge of Time Warner's integration into AT&T if the merger succeeds - is throwing Comcast under the bus to show that the company is by no means inclined to do what the DOJ believes they would do.

 

This is the fifth week of the AT&T/Time Warner trial. Since the estimate was six to eight weeks, we're getting really close to the end of this trial. I don't expect it to end next week unless there's a huge upset, so I'm waiting for the end of this month. At most, I think this will end by May 4th, although that is not accounting for Judge Leon taking the time to write up his opinion and deliver his verdict.

 

https://www.ft.com/content/96829b52-41b9-11e8-93cf-67ac3a6482fd

 

In the meantime, Shari Redstone seems to keep pushing towards a CBS/Viacom reunion, although there's still not much yet. It seems that the rumors of Moonves being ousted were greatly exaggerated, as he may want to stay on, though the regulatory concern here is that Redstone is forcing CBS to bail out Viacom. While mergers such as AT&T/Time Warner or Disney/Fox seem to at least offer some reason for how they could benefit consumers, there does not seem to be any such assurances for a CBS/Viacom reunion. It only seems like an effort to consolidate the Redstone family business.

 

https://www.cnbc.com/2018/04/19/fox-chose-disney-over-comcast-on-regulatory-stock-fears-filing-shows.html

 

Speaking of the Disney/Fox merger, new details are surfacing about how that merger came to be. While I don't believe it will change much in the long term, it offers some interesting insight. Comcast actually made a higher bid for Fox before Disney made theirs. However, Fox was actually more concerned about getting regulatory approval with Comcast, and Comcast did not offer any kind of deal in case a merger were to fall through. I would also like to mention that, back in 2004, Comcast made a bid to acquire Disney, though they dropped it after two months. While I understand the concerns about Disney being too powerful, ultimately I believe that Comcast is even more dangerous, so Disney is the safer bet for Fox.

 

 

…I find it a little interesting how Comcast is basically the biggest "enemy" to both the AT&T/Time Warner and Disney/Fox mergers. I really hope that, regardless of how those mergers turn out, the DOJ does take a look at Comcast's ownership of NBCUniversal.

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https://www.nytimes.com/2018/04/19/technology/att-ceo-time-warner-merger.html

 

Not too much, but I think this is a necessary update regarding the AT&T/Time Warner trial. AT&T CEO Randall Stephenson testified today, and his main argument was reiterating AT&T's need to compete with Silicon Valley's FAANG, although the DOJ contested that it's actually AT&T who has the advantage over FAANG, as AT&T is an ISP. Emails also suggest a very cordial relationship between Facebook and AT&T, so the claims of competition seem very dubious at best. AT&T maintains that the need premium video content, and undercuts the concerns against blackouts by saying that they need more people who will watch the content.

 

As that article notes, all that's left is for the DOJ to provide rebuttal arguments, and then the case will proceed to both sides providing their closing arguments.

 

I'm really looking forward to next week.

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As the AT&T trial is winding down, I think it's safe to say that AT&T is going to own Time Warner soon.

 

https://nypost.com/2018/04/24/doj-brings-back-expert-witness-in-bid-to-save-att-time-warner-case/

 

Carl Shapiro came back, and it was an even worse showing this time. The poll results he used to show AT&T's blackout potential were altered to show a higher result, so the DOJ's evidence is suspect at best. While they are trying to accuse AT&T and Time Warner of cherrypicking, it seems that the DOJ's main arguments have each been dismantled over the course of the trial. Looks like closing arguments may take place next week, so… if this goes through, prepare for a lot more mergers to start ramping up soon.

 

https://www.bloomberg.com/news/articles/2018-04-25/comcast-formalizes-sky-bid-in-challenge-to-rupert-murdoch-s-fox

 

For example, Comcast has formally made their higher bid for Sky, which means the bidding war has begun in earnest. So far it seems that Comcast does have the advantage here, and the question is whether or not Disney/Fox are willing to raise their own bid. As such, Sky has withdrawn their own recommendation for cooperating with Fox, since they do seem to believe Comcast is the better bet for them at the moment.

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https://www.axios.com/att-time-warner-closing-arguments-152512052-3f6cd8b5-65e6-4e4e-b70d-7d1fe270928b.html

 

The AT&T/Time Warner trial has ended, though Judge Leon will provide his ruling by June 12, or possibly earlier. AT&T and Time Warner had set their own deadline for June 21, so the potential ruling would be running really close to that deadline. It's possible that both sides may reach a settlement, although the DOJ still wants a divestment of either DirecTV from AT&T, or Turner from Time Warner, as the union between those two is the cause of the DOJ's concern, while AT&T and Time Warner have made it clear that there really is no deal without both of them.

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