Floodgates Are Open for Big Mergers After ‘Landmark’ AT&T-Time Warner Decision, Experts Say
Trump administration is “not standing on solid ground” if it fights future mergers, Villanova business professor tells TheWrap
Trey Williams | June 12, 2018 @ 6:22 PM
Last Updated: June 12, 2018 @ 6:23 PM
AT&T Time Warner
Now that a judge has granted AT&T the green light to acquire Time Warner for $85.4 billion, a media industry-wide scramble for assets is highly likely, Villanova business professor Mary Kelly told TheWrap on Tuesday.
“This opens the floodgates,” said Kelly. “I don’t think some of these other companies can just sit on their hands. They don’t have the luxury of time.”
Earlier on Tuesday, U.S. District Judge Richard Leon ruled in favor of AT&T and Time Warner, shutting down the U.S. Department of Justice’s argument that the proposed merger will hurt competition and consumers.
The decision is the first real test of antitrust regulation under President Trump, and CFRA analyst Tuna Amobi, like Kelly, also expects that because of the “regulatory clarity” stemming from the case, companies across multiple industries will now catch the merger and acquisition bug.
The most immediate impact is expected to be on Disney’s plan to acquire billions in 20th Century Fox assets. AT&T’s “resounding victory” in the “landmark” case is likely to complicate matters considerably.
“Comcast,” Amobi said, is likely “to be emboldened to make a better offer [than Disney] for Fox.”
Judge Leon’s decision dealt a blow to President Trump, who has been a vocal opponent of the AT&T acquisition of Time Warner since his 2016 presidential campaign. However, in Leon’s written opinion, he said it is unlikely that the government will prevail if it appeals his decision.
Kelly agrees with that reasoning, and cautions the president not to try stopping future such deals with the same fervor.
“He has to be careful not to double down and try to fight some of these coming mergers. I don’t see them being challenged,” Kelly said. “If he fights them, he’s not standing on solid ground.”
9 Biggest Billion-Dollar Entertainment and Media Deals in 2017 (Photos)
While all eyes were on AT&T's $85 billion acquisition of Time Warner, announced in late 2016 but facing an antitrust lawsuit from the Justice Department, there were plenty of other megadeals in media, tech and entertainment that kept investment bankers busy in 2017.
Here are some of the biggest deals of the year:
Getty Images
Disney to acquire most of 21st Century Fox for $52.4 billion
In a massive deal that could change the entertainment industry even more than AT&T-Time Warner, Disney announced plans to acquire Fox's film and TV studios and much of its non-broadcast television business, including regional sports networks and cable networks such as FX, FXX and Nat Geo. Disney would also pick up Fox’s stake in the European pay-TV giant Sky — and be better positioned to win regulatory approval to complete the acquisition of the 61 percent of the company it does not already own.
Discovery Communications agrees to buy Scripps Networks Interactive for $11.9 billion
The merger of two cable powerhouses brings together channels including Discovery, Science, Food Network and HGTV – and could give the combined company a stronger position as pay-TV continues to migrate to the internet.
Discovery/Scripps
Sinclair Broadcast Group agrees to buy Tribune Media for $3.8 billion
This deal, if approved, would give conservative-leaning Sinclair control of 223 stations in 108 markets, including 39 of the top 50, covering 72 percent of households in the country. And it's only possible under rule changes implemented by new FCC Chairman Ajit Pai.
Sinclair/Tribune
Cineworld offers to buy Regal Cinemas for more than $3 billion
After a string of movie theater mergers last year, the sector has quieted down -- along with the box office. And while this isn’t yet a done deal -- or even an accepted offer -- British chain Cineworld made a late November bid of $23 a share for the U.S.’s No. 2 cinema chain.
Cineworld/Regal
Meredith Corp. acquires Time Inc. for $2.8 billion
The magazine megadeal is a sign of changing times in the publishing industry, with the owner of esteemed brands like Time, Fortune and Sports Illustrated selling to the parent of Better Homes and Gardens and Country Life – backed by $650 million from big-time conservative donors the Koch brothers.
Meredith/Time
Verizon acquires Straight Path Communications for $2.3 billion
Straight Path may not be a household name, but it was the subject of a bidding war between AT&T and Verizon. The company is one of the largest owners of millimeter wave spectrum, seen as key to the buildout of 5G networks, which should power much faster mobile internet -- better for video -- in the near future.
Verizon/Straight Path
Disney buys the rest of BAMTech for $1.6 billion
The Mouse House jumped into internet TV in a major way in 2017, announcing upcoming Disney and ESPN-branded streaming services and acquiring the rest of streaming tech company BAMTech to power those products.
Disney/BAMTech
Entercom buys CBS Radio for $1.5 billion
CBS Radio was intended to be spun off from its broadcast parent in an IPO, but instead it was scooped up by a competitor. The combined company, now the second largest radio business in the country, owns and operates 244 stations in 47 markets.
Entercom/CBS Radio
MGM buys the rest of Epix for $1 billion
The independent studio went all in on the pay-TV business, buying the rest of the premium cable network from Viacom and Lionsgate. And that's paid immediate dividends, as MGM's media networks division propelled it to a strong third quarter.
MGM/Epix
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Rewind 2017: Media and content consolidation continued this year
While all eyes were on AT&T's $85 billion acquisition of Time Warner, announced in late 2016 but facing an antitrust lawsuit from the Justice Department, there were plenty of other megadeals in media, tech and entertainment that kept investment bankers busy in 2017.
Getty Images
