CNN Not Being Sold as Part of AT&T/TW, AT&T CEO Says

Time Warner stock closed down 6.5 percent to $88.50 Wednesday after reports (here and here) DOJ was pushing for divestiture of Turner Networks or of DirecTV as conditions on AT&T's proposed $108.7 billion buy of the programmer. AT&T Chief Financial Officer John Stephens told investors it's in active discussions with Justice, but "timing of the closing of the deal is now uncertain." Separately in a statement, CEO Randall Stephenson said that throughout DOJ's review of the deal, "I have never offered to sell CNN and have no intention of doing so.” Turner's assets include CNN. AT&T had expected to close on TW by year's end (see 1711020051). Free Press said it continues to oppose AT&T/TW on media consolidation grounds, and forcing divestiture of content properties such as Turner distribution properties or DirecTV could soften those consolidation harms, but department opposition is problematic if it's based on President Donald Trump's antipathy to CNN coverage: "Everyone should agree that the government shouldn’t base antitrust decisions or FCC rulings on whether it likes a newsroom’s coverage." As a candidate for president, Trump said he opposed AT&T/TW (see 1610220002). If Justice has a problem with a vertical merger like AT&T/TW, the possibility of horizontal mergers in the sector seems "substantially lower" than previously thought, meaning a Disney move for Fox wouldn't pass muster, let alone Comcast buying Charter or any further content assets, BTIG analyst Rich Greenfield emailed investors Wednesday. He raised the specter of Comcast having to sell its NBC or Hulu ownership after the Comcast/NBCUniversal consent decree ends, saying if AT&T/TW is problematic for DOJ, "how is the former okay?" DOJ in a statement said it's "committed to carrying out its duties in accordance with the laws and the facts." Wells Fargo analyst Marci Ryvicker, in an email to investors, said there are no potential buyers for DirecTV, but CNN could command $8 billion to $10 billion and be a strategic fit with CBS. She also said while there's now "a really uncertain spell on M&A in general," Discovery/Scripps Network and Sinclair/Tribune are likely not at risk.