Bad news for President Trump as his prediction he could stop the sale of Time Warner and its CNN division turns out to be “fake news.”
In a closely watched legal case, Federal District Court Judge Richard Leon today announced he will allow the long-delayed $85 million deal for AT&T to buy Time-Warner, including the CNN news channel, which President Trump has adamantly opposed since the 2016 campaign.
AT&T-Time Warner merger approved, setting the stage for more consolidation across corporate America https://t.co/Iqlsbfnzc9
— Washington Post (@washingtonpost) June 12, 2018
On the campaign trail in October 2016, Trump said that “deals like this destroy democracy, and we will be looking at breaking that deal up.”
“As an example of the power structure I’m fighting, AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few,” Trump said.
“They are trying to poison the mind of the American people,” added Trump.
After he was elected, Trump’s Department of Justice under Jeff Sessions filed suit to block the takeover late last year – which was very unusual both for a Republican and in general since it is considered a vertical merger of two companies that are in very different businesses.
The government argued that the merger concentrated too much power in one company but AT&T pointed out its competitors like Verizon, FaceBook, Google and others are already bigger and without the scale, it cannot compete in the new business environment.
AT&T’s lawyers tried to get evidence showing Trump was opposing the merger because of his hatred for CNN and because he was vindictive about reporting about him and his campaign.
The judge did not allow AT&T to seek correspondence and emails between Trump and Sessions which might have shown the president’s intent.
The judge did not indicate during the trial how he would rule and the possibilities included blocking the deal or allowing it only with conditions that might have included forcing the spinoff of CNN or other assets.
The ruling, which the government may appeal, is expected to open the floodgates to other vertical mergers and impact some pending deals such as Disney’s acquisition of part of Fox’s movie and TV businesses.
This is very bad news for Trump who now looks toothless in his attacks on what he calls the “fake news” media.