What would it look like if the President of the United States punished American businesses he didn’t like, or news organizations that reported things he didn’t like?
It would look like this: Trump’s Department of Justice is threatening to scuttle AT&T’s purchase of Time Warner unless the merged companies dump CNN and Turner, the cable unit that houses CNN, according to a source familiar with the DOJ’s review.
We got a hint of this this morning, when AT&T’s CFO said he wasn’t sure when the deal would close — though he still thought it would close.
We could spend time discussing why this makes no sense under conventional antitrust law, since AT&T/Time Warner is a “vertical” merger, where the two companies are in different lines of business.
But don’t ask us. Ask antitrust expert Makan Delrahim, who announced last year that the proposed deal shouldn’t be a problem.
Since then, Delrahim has been signaling that he may have problems with AT&T/Time Warner after all.
Sober industry observers — including ones that had problems with the deal — figured that Delrahim wanted to slow down approval of the deal, perhaps because he didn’t want to rubber stamp it.
And if he did have problems with it, a logical place to look would be AT&T’s ownership of HBO, which rival pay TV networks had argued would give HBO unfair footing.
Nope. Per the FT, “It’s all about CNN,” which makes sense if you are a leader of a banana republic who believes that news outlets that report stories critical of your leadership are “fake news.”
Or, if you don’t really think that but know that saying that sort of thing riles up the people who voted for you. Just like complaining about NFL players who engage in silent protest before the start of games whips them up.
If the deal ends up in court, odds are very good that AT&T and Time Warner could win (again, ask 2016-era Delrahim).
But just the threat of a long legal battle could be enough to break up the deal. It’s one thing for AT&T to say it wants to spend $86 billion to buy Time Warner. It’s another to say it wants to spend years in court to get the deal done.
Ever since Trump’s election a year ago, we’ve seen business leaders attempt to play up to Trump’s tinpot tendencies by agreeing to show up to public events with him and telling him they are taking his concerns Very Seriously.
Some have gone a step further, telling him they are changing the way they do business now that he’s there: Intel, SoftBank and IBM, for instance, have sought to attribute their hiring or investment pledges to Trump, even though their expansion plans were well under way before Trump took office.
AT&T CEO Randall Stephenson has played along as well. Stephenson visited Trump Tower before Trump officially took office, and months later pledged to invest $1 billion in the United States if the U.S. government secured tax reforms.
Now it looks like that’s not enough to satisfy Trump. And that’s chilling: Not just for people who think press outlets should be free to report critically on the government without fear of repercussion. But for business leaders who thought that they could please Trump with a bit of bowing and scraping.