US antitrust regulators and AT&T Inc sparred on Wednesday over whether the wireless carrier would be required to sell Time Warner Inc's CNN cable network as a condition of approval of its deal to buy the media company.
Media outlets, including Britain's Financial Times and CNBC, had reported that the US Justice Department told AT&T its acquisition of Time Warner would be blocked unless the company agreed to sell either CNN or AT&T's satellite television operation, DirecTV.
"Throughout this process, I have never offered to sell CNN and have no intention of doing so", chief executive Randall Stephenson said. On Monday, the Justice Department says it met with AT&T to discuss the matter. The dispute is the latest twist in a deal which took on broader political significance immediately after its inception in October 2016. He has not commented on the transaction since taking office in January.
AT&T and Time Warner declined to comment.
Both companies are struggling trying to keep their younger viewers from cutting the cord and shifting to online offerings such as Prime Video by Amazon and Netflix. But regulators' desire for asset sales will complicate negotiations. The previous administration settled a similar tie-up between a pay-TV company and an entertainment giant, the acquisition of NBCUniversal by Comcast Corp., by imposing conditions.
The suit says the group is also concerned about Trump targeting other news organizations including threats to revoke broadcast licenses of media networks, hints about using antitrust authorities to punish the owner of The Washington Post and calls for journalists to be fired by their employers.
In a statement on Wednesday, Stephenson flatly denied that CNN was for sale.
According to a Justice Department source, AT&T first raised the possibility of selling off CNN. While lawmakers are calling the uproar political, the Justice Department's new leadership is taking a different view of the anticompetitive issues surrounding the deal than its predecessors under Barack Obama. Analysts have predicted the Trump administration's generally pro-business stance would override Trump's personal distaste for the deal.
Stephenson defended the Time Warner deal and said AT&T is continuing to talk with the DOJ "to see if we can get to a negotiated settlement". Delrahim was subsequently nominated by U.S. President Donald Trump to head the Justice Department's antitrust division and was confirmed in September.
Another sticking point in discussions is the length of time that the U.S. government wants to impose conditions on what AT&T can and cannot do after a deal.
Halting the deal between AT&T and Time Warner would require regulators to prove that previous mergers had resulted in worse service for consumers and that shedding assets would be better than behavioral remedies.