AT&T-Time Warner Merger Completed Shortly After Court Ruling

On Thursday, AT&T announced the completion of their merger and acquisition of Time Warner. This news comes soon after a judge’s ruling that the action falls in line with antitrust laws, which rushed the companies to finish the deal in a short time. The Justice Department has shown no explicit desire to appeal this decision, although how they will proceed is still unknown.

In a surprising conclusion to the process, Judge Richard Leon not only ruled in favor of the merger but encouraged the government neither to appeal his decision nor to ask for a stay, declaring that doing so would not be fair. His decision’s conclusion reads:

“The consequences of receiving such a stay would cause irreparable harm to the defendants in general and in specific. First, it would effectively prevent the consummation of the merger by the June 21, 2018 break-up date for the deal. Second, it would cause to have to pay the $500 million break up fee it will owe to Time Warner if the deal is not consummated by that date… In this Court’s judgment, a stay pending appeal would be a manifestly unjust outcome in this case.”

The deal will merge several of AT&T’s services, such as mobile data and fixed telephony, with Time Warner’s entertainment-related services. The acquisition was reportedly 85 billion dollars.

A case justifying the acquisition was made by both companies, stating that the market is now increasingly being dominated by other enterprises such as Netflix and Facebook and that other companies should merge to make more of a profit. The case they made is representative of a growing demand that companies both create and distribute content. This could represent a substantial shake-up in the way that entertainment companies, especially television and streaming platforms, operate. Companies would focus on creating streaming platforms for their original content, which would prevent television networks from continuing to air said companies’ content.

This approach was deemed to be both dangerous and problematic by the public and the Justice Department. The merging of several industries into one company could raise competition and ultimately hurt customers due to rising prices.

After the confirmation of the deal, AT&T owns Time Warner’s HBO, CNN, Warner Bros. Entertainment and Adult Swim.

AT&T’s acquisition of Time Warner is particularly concerning due to the huge amount of content that the former is now in control of. Given their stated intentions in court, it would be safe to assume that the company will now try to create as much content as possible with their newly acquired properties. Some of them include the DC Cinematic Universe, Harry Potter, LEGO and several horror movie franchises. This would also seem to fall in line with the talks about creating a streaming service with only Warner Bros. Pictures related content.

These beliefs were confirmed by Randall Stephenson, AT&T’s CEO, in a statement after the ruling. He said to the press:

“The content and creative talent at Warner Bros., HBO and Turner are first-rate. Combine all that with AT&T’s strengths in direct-to-consumer distribution, and we offer customers a differentiated, high-quality, mobile-first entertainment experience. We’re going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors, and advertisers.”