Turner Networks CEO John Martin offered an unvarnished appraisal of the Justice Department’s lawsuit seeking to block the merger of AT&T and Time Warner: “I think the government is clueless.”
Martin used the platform of the Code Media stage in Huntington Beach to shoot holes in the Trump administration’s rationale for challenging the merger.
“As a person who’s actually going through the process and has been in depositions, the theory of the case just makes absolutely no sense. None,” Martin said. “In the history of the country, what vertical merger has tilted the landscape of the competitive environment? Let me give you the answer: Zero.”
The Justice Department sought to block the $85.4 billion deal, arguing competition would suffer from the combination AT&T, one of the nation’s largest internet and telephone providers and owner of the country’s largest pay TV distributor, DirecTV, with one of Hollywood’s dominant film and television studios.
The case is scheduled to reach trial on March 19.
Martin sought to portray a competitive landscape in which smaller media companies are doing battle with technological giants like Amazon, Google and Facebook, with vastly larger market capitalizations and resources.
“AT&T, since the announcement of the Time Warner merger, has zero grown. They’re flat. I think Amazon and Google have essentially, in terms of market cap, the equivalent of AT&T and Facebook has added the equivalent of two times Time Warner,” said Martin. “If you’re the government and you’re worried about fixing the competitive landscape, what are you worried about?…It’s a massive misallocation of resources and capital to fight this thing. They’re going to lose.”
Asked about what might happen should the deal fall through, Martin said Time Warner CEO Jeff Bewkes and the company’s board of directors would determine the “plan B”
“We think that an AT&T combination can supercharge our ability to get to our strategic goals,” Martin said. “But if it doesn’t work, we’re going to be fine…Time Warner is a pretty stable, big, successful company. HBO is on fire right now. Warner Brothers had its most successful year in its history in 2018. We did too.