AT&T-Time Warner Merger Approved, Setting Stage For More Consolidation

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"We continue to believe that the pay-TV market will be less competitive and less innovative as a result of the proposed merger between AT&T and Time Warner", said Assistant Attorney General Makan Delrahim. He teaches constitutional law in the political science department at the University of California, San Diego, and practices at the firm Constantine Cannon.

Comcast's offer was made public one day after a federal judge approved an $85.4 billion merger between AT&T and Time Warner, despite a challenge from the Justice Department, which argued the deal would harm consumers and weaken competition in the media space.

According to Dealogic, Comcast's offer for the Fox properties would be the second-largest ever deal in the media sector, trailing only AOL's merger with Time Warner in 2000, which was valued at $94.3 billion excluding debt.

After the decision, Mr Petrocelli said: "We were surprised when the case was brought and as I said in closing arguments, it's a case that never should have been brought".

The judge didn't buy that. Donald Trump criticized the deal during the 2016 election campaign, and some analysts said the president wanted to block any deal helping Time Warner unit CNN, which he regularly attacks.

Number three wireless carrier T-Mobile, meanwhile, is seeking a tie-up with number four Sprint.

The judge advised the United States regulators that their arguments were so weak that they should not even bother to appeal, although several legal experts believe the ruling is so significant it will not go unchallenged.

For Comcast, this is Take 2 in approaching Fox.

AT&T has said it needs to buy Time Warner to compete with the likes of Amazon, Netflix and Google in the shape-shifting streaming-TV environment.

The DOJ filed suit against AT&T in November of a year ago, claiming that if the deal were allowed to go through, Time Warner's Turner television networks could be withheld from competing TV carriers or licensed at such a high cost as to give AT&T (who also owns DirecTV) an unfair advantage over its competitors.

"As for Disney, this legal outcome was probably the least attractive as it will likely lead to an aggressive counter-bid from Comcast and an absence of heightened regulatory concern from the (21st Century Fox) board", writes Michael Nathanson, an analyst with MoffettNathanson, in a note to clients today.

The deal, which could close next week, is seen as a turning point for a media industry that has been upended by companies like Netflix Inc and Alphabet Inc's Google which produce content and sell it online directly to consumers, without requiring a pricey cable subscription. It was, Trump said, "a deal we will not approve in my administration".

The Justice Department sought AT&T to divest CNN parent company Turner Broadcasting or DirecTV, the big satellite-television operator, to gain Justice Department approvals for the deal. For instance, it could compel a rival cable company like Comcast to pay sharply higher fees for the right to carry Time Warner shows like NBA basketball games or the hugely popular HBO drama "Game of Thrones".

Warner Bros. will give AT&T a big presence in Hollywood.

"We're disappointed that it took 18 months to get here", he added, "but we are relieved that it's finally behind us".