Last week, many were caught off-guard by reports that AT&T’s massive bid for Time Warner had hit a rough patch. In a matter of days, the $108.7 billion acquisition went from looking like a done deal to something much less certain, with the Justice Department and AT&T seemingly at loggerheads and possibly headed toward a lawsuit.
In the middle of it all was a fierce disagreement over the future of CNN, a frequent target of President Donald Trump’s criticism and a Time Warner property.
AT&T, the telecom giant, wants to buy up Time Warner, one of the world’s biggest entertainment companies. Time Warner — not to be confused with Time Warner Cable — owns companies such as HBO and Turner Broadcasting, which is the parent of CNN.
Time Warner also controls Warner Bros. and everything in it — DC Comics (including Batman, Superman, Wonder Woman and the Justice League film), the Harry Potter franchise, the Lord of the Rings films and a whole lot more.
AT&T said it’s doing this because it wants to build an advertising and content behemoth to rival Facebook and Google. AT&T could use Time Warner’s huge content library to draw in new customers, gather information about them and create more advertising opportunities that will make more money. With the new holdings, AT&T would gain control over a $29 billion chunk of the entertainment industry and potentially reshape how Americans get their media and information.
It turns out AT&T’s deal talks with DOJ weren’t going as smoothly as everyone thought. Tensions arose about how and whether AT&T should sell off some of Time Warner’s assets as part of the deal — with some saying DOJ asked AT&T to sell off Turner Broadcasting, CNN’s parent, while others said the reverse, that AT&T had suggested it. Regardless of who first broached the issue, what should happen to CNN under AT&T is a key aspect of the spat.