In a lengthy appearance on CNBC from Sun Valley, where he is attending the Allen & Co. retreat, AT&T CEO Randall Stephenson dismissed any threat from the government’s appeal of a judge’s decision allowing the company’s merger with Time Warner.
“We think the likelihood of this thing being reversed and overturned is really remote,” he said. “This changes nothing. … The merger’s closed. We own Time Warner.”
Investors and the entire media and entertainment sector are still trying to wrap their minds around the Department of Justice’s decision to appeal. AT&T stock has fallen almost 2% in morning trading today, to $31.59, and was downgraded by Wall Street firm Raymond James due to the uncertainty re-introduced into the company’s narrative by the appeal.
Stephenson was repeatedly asked by CNBC hosts about whether politics had driven the appeal given the decisive nature of U.S. District Court Judge Richard J. Leon’s decision in June. When the merger was first announced in October 2016, Donald Trump (not yet president) voiced his opposition to it on the basis of its scale. As a known foe of Time Warner’s CNN, though, many observers wondered if he had ordered the DOJ to file its lawsuit last fall seeking to block the deal. Under that same theory, given the one-sided nature of the decision, the specter of Trump’s CNN spat looms over the appeal as well.
“That’s a question that’s been asked since Day 1,” Stephenson said. “I’ll leave that for others to speculate about.”
The litigation of the appeal in U.S. Circuit Court in Washington will take about five to six months, Stephenson said, and will extend a “costly” process for both AT&T and taxpayers.
In terms of the broader effect the appeal could have, for example on Comcast’s prospects for continuing its bidding on 21st Century Fox assets, Stephenson said “it probably can’t help it.” During a historic period of M&A in media, Stephenson was asked if other media executives should pause before moving forward with other deals. “I don’t think I’d be looking at [media companies] any differently than I did yesterday. … It wouldn’t affect my thinking much at all.”