They’ll want to ensure this isn’t a sly way of obscuring the growing might of AT&T in the marketplace.Īs for Wednesday’s announcement of Amazon’s latest acquisition, that one is much more like the AT&T-Time Warner deal - vertical integration, and a development that despite its relatively smaller size, could provoke another government attempt to block. Then again, it’s also no slam dunk: Makan Delrahim, the Trump-era antitrust enforcer, is among those who expect that regulators will take a hard look at AT&T’s 71 percent equity in the merged spin-off. It may help that Discovery’s forte is unscripted programming, which some in Hollywood may see as less of a concern on the jobs front. That said, the merging parties will surely point to their nascent streaming services - HBO Max and Discovery+ - as lagging behind Netflix and Disney+ and present the tie-up as necessary for competition. Rather, this one features horizontal consolidation as WarnerMedia and Discovery both have a massive footprint in TV production. Ultimately, a judge permitted the $85 billion marriage between one of the nation’s largest telecoms and one of the country’s biggest content producers.ĪT&T’s decision to now spin off its Warner unit marks a stunning turn, although at least for WarnerMedia-Discovery, the deal isn’t another instance of vertical integration. At the time, many observers saw the Trump-era DOJ’s pursuit through a political lens given the president’s anti-media views, although from a legal perspective, it was a huge development in antitrust enforcement - the first time in decades that the government had sought to stop so-called “vertical integration,” that is, a tie-up between a distributor and supplier. That case now shadows over today’s media merger frenzy, and could signal a bit about what’s ahead. Notably, the prior administration went to court in 2017 to stop AT&T’s $85 billion acquisition of Time Warner and failed in its antitrust case. The pairing of AT&T’s $43 billion spinoff of WarnerMedia with Discovery as well as Amazon’s $8.54 billion acquisition of MGM Studios presents the Biden Administration with its first major merger reviews.
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