AT&T CEO Randall Stephenson took the witness stand this afternoon, appearing in a Washington federal court as the final defense witness in the five-week antitrust trial over the mobile giant’s pending merger with Time Warner.
Ridiculing the Department of Justice complaints as “absurd,” the bespectacled 58-year-old architect of the deal defended it as a necessary measure by two traditional companies facing unprecedented competition from tech rivals. By joining forces, he said, the content engine of Time Warner will be amplified and fine-tuned by AT&T’s distribution systems. “It’s really simple: The more people who watch your content, the more your content is worth,” Stephenson said, according to multiple press accounts. (The trial, in U.S. District Court, is not being streamed or broadcast.)
Stephenson’s testimony followed that of Time Warner CEO and AT&T exec John Stankey on Tuesday and Wednesday. The execs offered synchronous accounts of the efficiencies of the deal and rebuttals of government assertions that AT&T would use the Turner networks and HBO as a weapon to harm rivals and consumers. The DOJ rested its case last week, but will call “rebuttal witnesses” and both sides will submit more filings before the case officially goes to the judge. Much of the courtroom “action” (an intriguing, if relatively sedate, chess match) appears to have subsided in the case, with closing arguments likely before the end of April. The stakes continue to be enormous for Hollywood and the media business as Judge Richard J. Leon arrives at his decision in the coming weeks. When the $85 billion AT&T-Time Warner tie-up was announced in October 2016, it set off a wave of major deals, including some whose regulatory fate is bound up in Leon’s view of the media landscape.
Lead DOJ attorney Craig Conrath cross-examined Stephenson, but, as with prior government cross-examinations, did not appear to draw much blood. Guided by lead defense attorney Daniel Petrocelli, Stephenson focused his direct testimony on a core tenet of the defense argument. He repeatedly emphasized that traditional media is being fundamentally disrupted by what Bewkes had earlier described as “tectonic changes” in technology and consumer habit.
According to an account in the Washington Post, Stephenson hit on that theme from the corner-office perspective, noting that M&A has a time element. “I have a philosophy that if you’re not investing at the top tier … if you miss one technology cycle, it may not kill you, but it will make you sick for a very long time,” he said.