President Donald Trump has only limited tools for venting his often-expressed fury at CNN, even as his administration weighs whether to approve AT&T’s bid to purchase the network’s parent company, Time Warner.
Chief Trump strategist Steve Bannon has pushed the idea of blocking the merger, a White House official told POLITICO on Thursday, after months in which the president has accused the news network of airing "fake" and "dishonest" coverage of his administration. But the official added that Bannon hasn’t mentioned the matter in recent days and that it does not appear to be at the top of his agenda.
And many industry observers say Trump’s Justice Department has no obvious antitrust arguments for blocking AT&T’s $85 billion deal, which would give the telecom and wireless giant control of an entertainment conglomerate whose holdings include CNN, HBO and the Warner Bros. movie studio.
"Just because you don’t like CNN doesn’t mean you can block a merger," said Rich Greenfield, a media and tech analyst at the investment research firm BTIG. "You still need a legal basis, and calling CNN ‘fake news’ or ‘FNN’ doesn’t make the transaction illegal."
The New York Times reported Wednesday that White House officials were discussing using the merger review as a “potential point of leverage” over CNN, whose tensions with the Trump administration have worsened in recent weeks.
But other factors add to the political awkwardness of any potential move to block the megadeal: Trump’s pick to head the Justice Department’s Antitrust Division, Makan Delrahim, said in October that he didn’t think the purchase would pose a "major" antitrust problem. (Delrahim, who is still awaiting confirmation, later declined to comment on the merger at his Senate nomination hearing.) And the GOP-led FCC has indicated it will not review the deal because it’s structured in a way that puts it outside the agency’s jurisdiction.
Still, Trump has made plain his disdain for CNN, even singling the network out Thursday during his trip to Europe. “They have been fake news for a long time,” he told reporters during a news conference in Poland.
Days earlier, Trump had tweeted a link to a wrestling video that portrayed Trump hitting a man with a CNN logo superimposed on his face. CNN reporter Andrew Kaczynski later reported that he had located the anonymous Reddit user who first posted the video, stirring up a fuss that prompted Trump supporters to accuse the network of "blackmail."
CNN did not respond to a request for comment, though the network’s president, Jeff Zucker, told the Times that the pending deal does not influence his management of the network. Time Warner declined to comment, and AT&T did not respond to a request for comment.
If the administration does intervene in the AT&T-Time Warner deal, it would frame Trump’s stance as an opposition to business monopolies rather than a war on the media, the White House official told POLITICO.
Trump himself framed the issue that way during the presidential campaign, when he pledged that his administration would not approve AT&T’s bid for Time Warner. In an October speech, he called the deal "an example of the power structure I’m fighting" and said it represents "too much concentration of power in the hands of too few." The language was striking because it echoed the rhetoric of Democrats who oppose mega-mergers, rather than the business-friendly attitude of mainstream Republicans.
His stance has been murkier since then. In December, the Financial Times reported that Trump’s transition team “reassured AT&T that its $85.4 billion acquisition of Time Warner will be scrutinized without prejudice," a message that left AT&T executives feeling “confident.” Trump appeared to soften his rhetoric in a February interview with Breitbart News, declining to comment on the merger specifically while saying he wants to ensure competition in the industry.
The prospect of the White House using the government’s review as a cudgel against CNN sparked criticism Thursday from Democrats, who otherwise agree with Trump’s original concerns about concentrating so much power in AT&T’s hands.
“I have serious concerns about the AT&T-Time Warner merger because it stands to reduce consumers’ choices while increasing their costs," Sen. Ron Wyden (D-Ore.) told POLITICO. "Those are factors the government is supposed to take into account. Using news coverage of the president as a factor would be illegal and flies in the face of the First Amendment.”
Sen. Al Franken (D-Minn.), another skeptic of the merger, said an "independent antitrust division" should make the decision on the merger, adding, "The Trump administration’s war against the media must not influence the fate of this transaction."
The deal would combine AT&T’s wireless, broadband and pay-TV services, including DirecTV, with Time Warner’s media properties. Liberal critics say the deal would unfairly disadvantage competitors by giving AT&T an incentive to give priority to its own programming, a criticism that has been raised against past mergers between content creators and distributors.
AT&T and others have argued the Time Warner deal constitutes a "vertical" merger, meaning each company operates in different but related segments of an industry. Such deals are typically viewed as less dangerous to competition because they do not remove a direct competitor from the market, unlike deals such as AT&T’s unsuccessful 2011 attempt to purchase T-Mobile.
"I don’t think that blocking [the deal] is really a credible threat," said economist Hal Singer, who studies antitrust and media issues and has testified before Congress. "I think the most you could do is extract some sort of concessions as to the merged entity’s dealings with independent networks and rival distributors."
Singer has done work for AT&T in the past, but not on the Time Warner merger.
AT&T has deployed its formidable political machine in Washington to persuade the Justice Department to approve the deal, and earlier this year it retained lobbyist Bill Smith of Sextons Creek, a former longtime political aide to Vice President Mike Pence. AT&T CEO Randall Stephenson has met with Trump on multiple occasions since his election, including a June 22 summit with other technology leaders. At that meeting, Trump praised Stephenson for "doing really a top job," The Dallas Morning News reported.
Stephenson has also pledged to stay out of CNN’s decisions, telling the U.S. Senate antitrust subcommittee in December that AT&T is "committed to continuing the editorial independence of CNN" should regulators approve the deal.
Tad Lipsky, a former acting director of the Federal Trade Commission’s competition bureau who served on the Trump transition, said antitrust regulators pledge to remain apolitical in their reviews. He pointed to Attorney General Jeff Sessions’ statement during his confirmation hearings that politics would not influence the antitrust review process.
"I believe that is the appropriate stance for the antitrust agencies to take with regard to any antitrust law enforcement question," Lipsky said in an interview. "In my experience at both agencies, that approach was always followed scrupulously, and I hope and expect it will be the same in this and in any future administration."
Tara Palmeri and Ashley Gold contributed to this report.