President Trump: The NEW one and only politics thread

I mean certainly courts are not usually in the business of preventing vertical mergers. But it's not as though this is a completely novel theory--the DOJ required Comcast to enter a consent decree because it was concerned about these very issues, and plenty of people speculated that the government might want to block this merger, even before Trump started yapping about it.

 

Here's a link to the actual complaint, for anyone who cares to read it:

https://www.justice.gov/opa/press-release/file/1012896/download

 

And if he had waited a day or two, it might have been a valid point. Doing it around 7 a.m. for a story that broke after midnight, however, was just more of YF's bullshit.

 

To your points:

1) Not getting your point that DirecTV will "basically be a rival in the video transmission market to anyone it negotiates to sell its content to." DirecTV is fundamentally a transmitter/distributor of content, not a content creator. It doesn't negotiate to "sell its content," it negotiates with content companies such as cable networks for the right to distribute those channels/content in the form of carriage fees.

The best I can tell, Comcast's TV service customers are basically on par with DirecTVs, not a materially more limited footprint. And the article you link about the proposed Comcast/Time Warner Cable merger that was nixed after federal pushback was a more direct antitrust issue, in that one company with large cable/satellite interests (Comcast) was buying another (TWC) to make a potentially huge cable/satellite company. That's not at issue in AT&T/Time Warner. (And Time Warner Cable had already been spun off from Time Warner; it is not a part of the proposed AT&T/Time Warner merger.)

If you believe the issue is a company with a large cable/satellite business also owning significant content properties, including cable networks, then say that. But IMO that ship has long since sailed, including in the Comcast/NBCUniversal deal.

2) The current Time Warner has three divisions: HBO, Turner, and Warner Brothers. Yes, Turner owns most of the cable TV stations. But why sell Turner and not, say, HBO? And Warner Brothers certainly has lots of entertainment content – not just movies but extensive TV content, video-on-demand, etc., that also do deals with the DirecTVs and Comcasts (now Xfinity on the consumer side) of the world.

I understand that there are potentially legitimate anti-trust and anti-competitive issues that should at least be looked at in any large merger. But so much of the TV business is, as mentioned above, about the negotiation of carriage fees between cable networks and other content providers on one hand and cable/satellite distributors on the other. Thus companies seek to increase their negotiating leverage in some way. That can mean a content company buying other cable networks so it can negotiate as a bloc; a cable/satellite company buying other cable/satellite assets; or a cable/satellite company buying content assets, or vice versa. Unsurprisingly, we have seen all of those things.

I'm still not sure exactly what issues you are most concerned about, and that make you feel that it's legitimate for the DOJ to oppose the merger, especially since as Ragu notes, before Trump took office the same officials indicated they wouldn't have a problem with it. And none of it speaks to the DOJ's claim that it fears the deal will "potentially block creators of media content from distributing their product without paying more money," when their attempted dismantling of net neutrality makes clear that this admin doesn't care a whit about that.

 

Dude, I generally believe in markets too, but your absolutist stance on government interference is just pablum. AT&T and Time Warner wouldn't even exist except for the government "meddling" in private business and permitting the formation of a limited liability corporation that can sell equity to a disperse group of shareholders--maybe I should take your position and complain about having to deal with an entity like that all because of nettlesome government interference. But I'm not going to, because I realize there must be some balance.

The concept of unlawful restraints on trade have been around since at least the 1700s. Antitrust wasn't just created out of thin air by government regulators.

 

What properties are you referring to? Do you mean DirecTV's negotiated exclusive rights to NFL Sunday Ticket? Of course it's going to "withhold" them from DirecTV's rivals in the content transmission business, since after all, it spent (and spends) a great deal of money for the right to do just that. This proposed merger with Time Warner wouldn't change that one iota.

Aside from DirecTV's exclusive deal for NFL Sunday Ticket – for which it pays huge fees to be, well, exclusive – what other AT&T "properties" are you referring to?

 

Hmm. I'm not sure I get your point. DirectTV will be part of a company that is a content creator if AT&T buys Time Warner. I guess maybe I should have been a bit more precise: DirectTV will basically be a rival in the video transmission market to anyone [Time Warner, its corporate sibling] negotiates to sell its content to.

I'm not saying I necessarily have a problem with this. I'm saying it doesn't seem out of hand unreasonable to me, or inconsistent with the position Obama's DOJ took w/r/t the Comcast merger, and that plenty of people took when the AT&T/Time Warner merger was announced. The alleged discrepancy between the position taken by the DOJ and position taken by the FCC doesn't strike me as proof that the DOJ is politically motivated--it actually strikes me as a sign that precisely the opposite is true, and as further evidence that this administration is very disorganized and doesn't have a unified governing philosophy.

 

No--I'm talking about the rights owned by Turner Broadcasting. And the merger would change Turner Broadcasting's ability to withhold those rights--since it could do that to the benefit of its potential new corporate partner DirectTV.

Again, I'm not making this stuff up myself--it's in the DOJ complaint. Worth just reading it if you're interested. I'm not saying it's right or wrong--I'm just saying it doesn't strike me as completely unreasonable.

https://www.justice.gov/opa/press-release/file/1012896/download

 

I hope that if the merger goes through you're right--and that this is more accurate than some of your other market predictions...

In any event, we will see how "silly" it is when the case proceeds. DOJ will have its experts; AT&T will have its own. I don't know which will be right, but it'll be much more interesting to actually see that than just speculation.