AT&Ts Time Warner Takeover at Crossroads With Judge Weighing Ruling

AT&T’ s Time Warner Takeover at Crossroads With Assess Weighing Ruling

  • Companies, U. H. make closing arguments at antitrust trial
  • Judge says he will rule upon whether to allow deal June twelve

In the end, the fate associated with AT& T Inc. ’ ersus $85 billion merger with Time Warner Inc. will come right down to he said versus he stated.

Lawyers for AT& T as well as the Justice Department clashed one final time at the close of a six-week trial over the proposed combination, the deal the government aims to stop. The particular judge overseeing the antitrust situation said Monday he’ ll principle in a month and a half whether in order to block the deal.

“ This entire case is a house of credit cards, ” Daniel Petrocelli, the prospect attorney for AT& T plus Time Warner, said in closing fights Monday before U. S. Region Judge Richard Leon in Wa. At about the same time, outside a meeting in Los Angeles, Makan Delrahim, whom leads the Justice Department’ s i9000 antitrust division and decided to document the lawsuit last year, sounded similarly confident.

“ I wouldn’ t provide a case I didn’ t believe we would win, ” he stated.

The stakes are high just for both sides. A win just for AT& T would seal Ceo Randall Stephenson’ s vision in order to feed movies, TV and information to his 119 million cellular, internet and video customers. The Justice Department victory would confirm Delrahim’ s surprising decision in order to challenge the deal. It could also ensure it is tougher for other companies to win authorization for mergers that don’ capital t combine direct competitors, like CVS Health Corp. ’ s impending acquisition of health insurer Aetna Incorporation.

After each aspect presented its statements, Leon recognized the need to rule by the companies’ combination deadline of June 21, whilst leaving time for an appeal. This individual said he’ ll announce their decision at a June 12 listening to. He asked few questions throughout the closing statements.

CEOs Watch

Monday’ s i9000 proceedings saw the return to Wa of both companies’ CEOs, who have joined other executives and attorneys in the courthouse cafeteria before the listening to to socialize and discuss the situation. The group included Time Warner TOP DOG Jeff Bewkes, AT& T’ s i9000 Stephenson and AT& T professional John Stankey, who leads the particular merger integration team and will supervise Time Warner if the deal undergoes. All three men testified on the trial and watched Petrocelli create his final pitch.

The judge will be focusing on tons of opposing data and see testimony, including reports from dueling economists hired as experts by government and the companies. The teachers took turns criticizing each other’ s data and theories, plus were grilled during cross-examinations.

The U. S. states the deal would give AT& T, which usually owns DirecTV and is the biggest pay-TV company in the U. S., bargaining leverage over rival cable plus satellite companies that want Time Warner programming like CNN, TBS plus TNT. That would enable AT& To to increase prices for content, charging consumers more than $400 million annually, according to the government’ s estimate.

Panicked Rivals

Justice Department lawyer Craig Conrath described what the government viewed as a market panicked over the possible merger, featuring the testimony of rival pay-TV executives who feared they’ m face higher prices for articles or subscriber losses to DirecTV if they didn’ t agree to pay out. Conrath quoted testimony by RCN Corp. Chief Executive Officer Jim Holanda, who also said the deal is “ lose-lose for us, win-win for them. ”

While Petrocelli attacked the particular government’ s predicted price boost as unreliable, Conrath argued the federal government doesn’ t have to project cost increases precisely, just show there is a “ reasonable probability” associated with consumer harm resulting from the deal.

AT& T and Period Warner claim the deal is needed to contend with companies like Netflix Inc. which consumers will actually see decrease prices as a result of cost-savings from merging the two companies.

Main Mistakes

In his shutting statement, Petrocelli sought to emphasize what he said were main mistakes in the data used by the particular government’ s economic expert, Teacher Carl Shapiro of the University associated with California at Berkeley, whose record forms the backbone of the Proper rights Department’ s lawsuit to prevent the merger.

Petrocelli told Leon that after fixing all of Shapiro’ s alleged errors, the deal would lead to a price loss of 54 cents per subscriber a month, or savings of about $500 mil a year. Even under the government’ h flawed analysis, Petrocelli said, the particular merger would result in a price enhance of 13 cents per customer per month, which he called “ statistically indistinguishable from zero. ”

“ This test has exposed serious questions regarding the credibility of the government’ s whole presentation, ” Petrocelli said.