You will be redirected back to your article in seconds

AT&T-Time Warner Trial: DOJ Goes After Claims of Merger’s Cost Savings, Revenue Growth

WASHINGTON — The AT&T-Time Warner antitrust trial began to wind down on Monday as the Justice Department presented two expert witnesses who have raised doubts about the cost savings and new revenue that can be tied to the merger.

AT&T’s John Stankey, tasked with overseeing the integration of the companies, last week testified that his group had identified about $2.5 billion in merger synergies, including cost savings and additional revenue. Those synergies may play a role in how U.S. District Judge Richard Leon ultimately views the transaction, as they make the case that the merger will produce certain efficiencies.

One of the DOJ’s witnesses, Ronald Quintero, said that none of the companies claimed synergies that he studied could be verified through documentation or were not specific to the merger. He said that some of the figures that AT&T-Time Warner used were speculative.

In a contentious cross-examination, AT&T-Time Warner attorney Rob Walters tried to attack Quintero, suggesting that he “turned a blind eye” to finding out more about how the companies came up with the figures.

“I only know what they provided in documentation,” Quintero said.

Walters pointed to claimed cost efficiencies from corporate overhead that will come from the merger. For instance, there will be savings from the elimination of the Time Warner board of directors and the departure of Jeffrey Bewkes, its CEO, he said.

Quintero said that while such savings may be achieved through the merger, the companies had not provided adequate material for him to give them credit for the efficiencies in his review.

Another witness, Stanford professor Susan Athey, questioned AT&T’s projections for the growth of its ad business because of the merger.

AT&T projects expanding the sales of ads by “several hundred million per year” by 2020, Athey said, via the use of data to better target ad spots, including those on Time Warner’s Turner networks. She said that the projected revenue growth appeared to be based on assumptions, and that such targeting can be achieved via data sharing arrangements and without merger.

She also questioned whether AT&T’s plans to build an automatic ad platform, in which buyers and sellers across the industry could buy spots across screens and devices, would actually work. She said that Google tried to do something similar starting in 2007, but it shut down five years later because potential participants “didn’t see the value” in going to the platform.

AT&T-Time Warner attorney Mike Raiff highlighted how Time Warner’s Turner networks have been largely unsuccessful in acquiring useful ad-targeting data from third parties. He also pointed out that AT&T’s  automatic ad buying platform will initially depend on the availability of the Turner networks ad inventory.

The DOJ is seeking to block the merger, claiming that the combined company will gain increased leverage over AT&T’s distribution rivals for the rights to carry Time Warner’s Turner networks. That will ultimately lead to higher prices for consumers, the government says.

The trial is now in its sixth week, and witness testimony is expected to wrap up in the next several days. Carl Shapiro, the government’s economic expert, is expected to return to the stand on Tuesday. It probably can’t come soon enough. Leon on Monday instructed an attorney for AT&T-Time Warner, Rob Walters, that he had just one question left as his cross-examination of Quintero went on apparently too long. The judge later told Athey to answer questions directly, rather than provide lengthy explanations.

“You aren’t teaching a course here,” Leon said. “Answer the question.”

More Politics

  • Seth Moulton Launches Presidential Bid

    Rep. Seth Moulton Launches 2020 Presidential Bid

    WASHINGTON — Rep. Seth Moulton (D-Mass.), an Iraq veteran who has diverged from Democratic leadership in the House in recent years, announced Monday that he is running for president, saying that “decades of division and corruption have broken our democracy.” Moulton confirmed that he was running in an appearance on ABC’s “Good Morning America.” He [...]

  • Mueller Report Book Editions Top Amazon's

    Mueller Report Book Editions Shoot to Top of Best-Seller Lists at Amazon, Barnes & Noble

    Robert Mueller is now a best-selling author. Book publishers’ forthcoming editions of the special counsel’s report zoomed to the top of the Amazon’s and Barnes & Noble’s lists of book best-sellers Friday. That comes a day after the report was publicly released, culminating the nearly two-year investigation into Russian interference in the 2016 U.S. election [...]

  • Pete Buttigieg Show Business Donations

    Mayor Pete Buttigieg Is Totally Up for Booking Phish for His Inauguration

    Mayor Pete Buttigieg’s campaign seems to be going Phish-ing… in the best possible sense. (Unless you just hate the band Phish so much there is no best possible sense.) The Democratic presidential candidate has previously indicated his love for the group, and when a reporter suggested Phish play at his theoretical swearing-in festivities in 2021, [...]

  • National Enquirer - Jeff Bezos

    Hudson Media CEO James Cohen Purchases the National Enquirer

    Hudson Media’s CEO James Cohen announced Thursday that he will purchase the National Enquirer as well as American Media’s other tabloids, the Globe and the National Examiner. With the purchase of the National Enquirer, which Cohen reportedly bought for $100 million, he plans to strengthen their collaborative efforts, documentary shows, weekly podcasts, and theme parks. [...]

  • Donald Trump

    HBO Fires Back at Trump's 'Game of Thrones'-Inspired 'No Collusion' Tweet

    HBO is firing back at President Donald Trump after he sent another “Game of Thrones”-inspired tweet in response to the release of a redacted version of special counsel Robert Mueller’s report on the Russia investigation. “Though we can understand the enthusiasm for ‘Game of Thrones’ now that the final season has arrived, we still prefer [...]

  • Mueller Report Released: Networks Cut the

    Networks Curb Their Enthusiasm, William Barr Flexes as Mueller Report Goes Public

    The run-up to Attorney General William Barr’s news conference regarding the release of Special Counsel Robert Mueller’s report on the conduct of President Donald Trump suggested it was just one component part of a busy news day, something close to business as usual. And the broadcast — in which Barr stormily defended the President as [...]

  • Mueller Report: Redacted Version of Trump

    Mueller's Report Details Possible Trump Obstruction but Reaches No Conclusion

    WASHINGTON — Special counsel Robert Mueller’s report on the Russia investigation leaves open the question of whether President Donald Trump committed obstruction of justice, making clear that Trump was not exonerated. That was one of many takeaways after a redacted version of the highly anticipated document was released to the public on Thursday, captivating Congress, [...]

More From Our Brands

Access exclusive content