AT&T CEO says blackout ban shows company willing to settle DOJ fight
Chief Executive Officer of AT&T Randall Stephenson speaks during a moderated discussion before the Economic Club of New York, in New York City, U.S., November 29, 2017. REUTERS/Brendan McDermid
REUTERS: AT&T Inc's proposed seven-year ban on programming blackouts to distributors of some Time Warner Inc content shows that the company is willing to offer concessions to close its US$85.4 billion bid for the programmer, AT&T's chief executive officer said on Wednesday.The U.S. Department of Justice last week sued AT&T to block its planned acquisition of Time Warner, saying the combination could raise prices for rivals and pay-TV subscribers while hampering the development of online video."We’re prepared to make concessions," AT&T's CEO, Randall Stephenson, said at an Economic Club of New York luncheon. "What we put in the filing is a concession."U.S. District Court Judge Richard Leon, in Washington, D.C., who is overseeing hear the case filed by the Justice Department, on Wednesday set the first pre-trial hearing for Dec. 7.AT&T and Time Warner said in a filing on Tuesday that Time Warner's Turner unit had offered its distributors licensing terms that forbid Turner from "going dark" on any distributor for seven years after the deal closes if they were to reach an impasse in negotiations. Blackouts are considered to be a negotiating tool in carriage disputes between distributors and programmers.Sources told Reuters earlier this month that the Justice Department had demanded significant asset sales in order to approve the deal and that it asked AT&T to sell either CNN-parent Turner or AT&T's DirecTV business.
Craig Moffett, an analyst at MoffettNathanson, said in a research note on Wednesday that AT&T's offer to ban blackouts made it "reasonably likely" that the deal would be approved. He said it would be hard for the Justice Department to argue that such a commitment did not address its concern that AT&T would raise the rates it charges for Time Warner content to rival pay-TV companies."By agreeing to forgo the option of 'going dark,' AT&T has effectively agreed to abandon what would otherwise be their only real source of leverage in a negotiation," Moffett wrote.Shares of AT&T closed up 3.0 percent to US$36.48 on Wednesday while Time Warner shares rose 1.5 percent to US$90.92.Stephenson also said at the Economic Club lunch that AT&T's requested trial date of Feb. 20 was a "reasonable ask." The government requested that the trial start on May 7, according to court filings.
AT&T said in a separate filing with the U.S. Securities and Exchange Commission on Tuesday that it would extend the termination date of the Time Warner deal to April 22.(Additional reporting by Supantha Mukherjee in Bengaluru and Diane Bartz in Washington; Editing by Leslie Adler)
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