Time Warner Boss Jeff Bewkes Pushes Back At What DOJ Is “Missing”

Under cross-examination by a Department of Justice attorney, Time Warner CEO Jeff Bewkes hit back at repeated suggestions that the company has been growing its TV ad revenues even before pursuing the AT&T merger.

“What you’re missing is that the competition for advertising isn’t just about television,” he told DOJ attorney Claude Scott during his third hour of testimony this afternoon. “If digital advertisers are able to target consumers with messages delivered through search or other ways, that takes away from television.”

Scott spent about 45 minutes wending his way through internal corporate documents and Bewkes’ own statements during morning testimony to try to undermine his characterization of tech giants as an existential threat. Scott asked Bewkes to review tables showing recent ad revenue from 2012 to 2017, reading the figures aloud and they showed low-single-digit increases, not adjusting for inflation. “They actually went up, didn’t they?” he asked. “About flat,” Bewkes shot back.

The CEO testimony marked a key turn in the high stakes case, which miraculously may be heading into the home stretch. Word from both parties is that the defense may wrap up its case as soon as Tuesday. There are several more steps in the process, even assuming closing arguments happen by the end of the month. It will likely be a couple of weeks from that point before U.S. District Court Judge Richard J. Leon issues his opinion.

Bewkes, who largely kept his cool, occasionally showed signs of how grueling the 17-month grind has been to get the final word from regulators on the $85 billion deal. “You’re making a false silo there,” he growled at one point, when Scott noted that Google derives some 85% of its ad revenue from search engines. Bewkes argued that in 2018 the realms of video and search ads have commingled, to the point that it is not possible to segment out search.

When Scott drew Bewkes’ attention to documents prepared by the defense team showing a host of competitors from the international tech ranks, he paused on Chinese e-commerce giant Baidu (whose name he mispronounced as “BAH-doo”). Asked why so many global companies were listed as direct competitors, Bewkes stiffened. “We compete all over the world,” he said. International operations “are a third of our revenue.”

Scott further tested Bewkes’ patience by systematically taking inventory of efforts to launch digital and SVOD services across Time Warner, which, Bewkes conceded, both predate merger talks and continue to this day. But with HBO Now, FilmStruck, Boom or others still on the drawing board, he said, “we need a technology partner, a helping company” in order to bring any service to market. Silicon Valley firms, meanwhile, can do it all in-house, with their  thousands of engineers and customer acquisition and retention specialists on the payroll.

When Scott quizzed Bewkes about the use of data at Comcast after the cable operator acquired NBCUniversal (a transaction blessed by Leon), Bewkes shook his head. “I don’t know what data they’re allowed to use at NBC” from Comcast set-top boxes or other internal sources, he said. “I compete with them. I don’t run their company.”

This article was printed from https://deadline.com/2018/04/time-warner-boss-jeff-bewkes-hits-back-at-government-att-1202367312/