AT&T CEO John Stankey has defended the pending $43 billion merger of Discovery and WarnerMedia as it undergoes an antitrust review process and after congressional Democrats raised concerns over possible anti-competition market violations.
“What’s been articulated in those letters is really unfounded,” Stankey said of the current antitrust scrutiny of the deal during an appearance at the virtual UBS Global Technology, Media and Telecom Conference that was webcast. His appearance came on the heels of a letter from 30 members of Congress expressing concerns over possible violations of antitrust laws with the proposed transaction.
“This transaction raises significant antitrust concerns,” wrote Democratic members of Congress, including Senator Elizabeth Warren and Congresswoman Alexandria Ocasio-Cortez, in a letter sent to Attorney General Merrick Garland and Justice Department antitrust chief Jonathan Kanter on Monday.
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The letter added: “In particular, the merger threatens to enhance the market power of the combined firm and substantially lessen competition in the media and entertainment industry, harming both consumers and American workers. In light of these concerns, we respectfully urge the Department to conduct a thorough review of this transaction to ensure that it does not harm American consumers and workers by illegally harming competition.”
While insisting the antitrust review process was going according to expectations, Stankey discounted the overture from the Democratic legislators.
“Having been through a number of these [transactions] in my career, getting letters from members of Congress is not unusual. … When you have a lot of members of Congress, there’s always going to be those that have a different lens they want to put on something,” Stankey added.
Political chatter about the Discovery-WarnerMedia merger also coincides with the Justice Department and the Federal Trade Commission holding a workshop about competition in labor markets on Dec. 6 and 7. The agencies, as they spotlight efforts to protect and empower workers through competition enforcement and rulemaking, are also inviting public comments to be received by Dec. 20.
In May, Discovery unveiled a mega-deal to merge with AT&T’s WarnerMedia to create a new global media powerhouse, with the combined firm to be led by Discovery CEO David Zaslav, who recently signed a new contract keeping him in place until at least 2027. WarnerMedia and Discovery both have a massive presence in TV production, even as the merging partners will tout their emerging streaming services — HBO Max and Discovery+ — facing steep competition from Netflix and Disney+.
AT&T wireless users can expect continued access to WarnerMedia streaming service HBO Max after the mega-deal, AT&T CFO Pascal Desroches said recently. Speaking during another investor conference, Zaslav said, “I would expect that we will reach a commercial agreement to continue bundling HBO Max,” without providing specifics on the potential timing, length of contract or other details.
He added that this would provide a “good service for our customers,” but “also good distribution for Warner Bros. Discovery.”
Meanwhile, Zaslav reiterated during a recent conference appearance that he will move to Los Angeles to run the new content giant. “That is where the content is made; this is a content company,” the Discovery boss said. “I’m going to be very hands-on,” he added. After all, “the better our content is, the better chance we have of being the leading media company in the world.”
