How Did AT&T’s $100 Billion Time Warner Deal Go So Bad?

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How Did AT&T's $100 Billion Time Warner Deal Go So Bad?
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A year later, in the summer of 2016, Time Warner communications chief Mr. Ginsberg had breakfast with Peter Chernin, his former News Corp boss. and trusted adviser to Mr. Stephenson, at a café in Menemsha on Martha’s Vineyard. . Mr. Chernin asked Mr. Ginsberg what he thought the Time Warner prize was. “We would need $105 to $115 per share,” Ginsberg suggested, roughly at the top of his head. Mr. Chernin did not turn pale.

As soon as breakfast was over, Mr. Ginsberg called Mr. Bewkes. “Are you seated?” He asked. “Because I have incredible news that will blow your mind.”

The two companies announced their agreement on October 22, 2016. Neither AT&T nor Time Warner management were concerned about antitrust or other regulatory issues, as the vertical combinations – buyer and supplier mergers, rather than competitors – were almost never challenged on antitrust grounds. No such case had been tried in 40 years.

They hadn’t taken into account populist skepticism of big mergers or Donald J. Trump’s hostility to established media, especially CNN, which he repeatedly denounced as “fake news.” . Mr. Trump’s anger was particularly intense at CNN General Manager Jeff Zucker, unaware (or forgetting) that it was Mr. Zucker, as head of NBC Entertainment, who put ‘The Apprentice’ on the lineup. on NBC prime time and made Mr. Trump a TV star.

The proposed mega-deal was one of the few problems – perhaps the only problem – in instantly uniting the political right and left, with Mr. Trump, the Republican presidential candidate, and Liberal Senators Bernie Sanders and Elizabeth Warren, unlikely allies to oppose it.

With Mr. Trump’s unexpected election in November, AT&T realized there was a problem. In January 2017, the company hired the president-elect’s personal lawyer, Michael Cohen, paying him $50,000 a month to advise it on, among other things, the Time Warner merger, even though Mr. Cohen had no expertise. known antitrust.

The move seemed to yield immediate results. (Mr. Cohen did not respond to a request for comment.)

Just days after Mr. Cohen was hired, Mr. Stephenson invited Mr. Bewkes to join him for a Trump Tower meeting with Mr. Trump, as well as Mr. Trump’s son-in-law, Jared Kushner, and Councilor Stephen K. Bannon. Mr. Bewkes refused.

nytimes

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