You will be redirected back to your article in seconds

First Witness in AT&T-Time Warner Trial Challenged on Claims of Merger’s Harms

WASHINGTON — The first witness in the AT&T-Time Warner trial, an executive from Cox Communications, testified that the combined company would gain increased leverage that would allow it to demand onerous terms in carriage negotiations over the Turner networks.

Suzanne Fenwick, vice president of content acquisitions for Cox, said that they are “very concerned that we are going to be faced with a horribly ugly deal.”

“The leverage changes,” she said of what happens if the two companies combine. “They have a different incentive.”

She said that the Turner networks, including CNN, TBS, and TNT, were the type of prized content that it needed. If Cox failed to reach an agreement with Turner in carriage negotiations, it would face a loss of subscribers because of the loss of those channels, she said. She added that they believed it was a “large number.”

One of the key claims that the Justice Department is making in its antitrust case is that the combined company would have the incentive to raise prices on rivals for the Turner networks. Without that “must have” Turner content, competitors like Cox would face losing subscribers, some of whom would go to AT&T-owned DirecTV.

“If we didn’t have the Turner networks it could significantly impact the viability of our business model,” she said.

But Fenwick was challenged by Dan Petrocelli, the lead counsel for AT&T-Time Warner. In a rigorous cross examination, he asked why Cox had never done any type of economic analysis on what would happen if they actually lost the Turner networks.

In one heated exchange, Petrocelli pointedly asked her, “You think you can come in here and just give your opinion, when you have never done a single bit of quantitative analysis?”

Fenwick answered, “Sure,” but that her point was that the leverage in carriage negotiations changes.

Petrocelli argued that it doesn’t, as AT&T-Time Warner would face the loss of carriage fees as well as advertising if it no longer appeared on Cox’s platforms.

The trial will resume on Monday, with Warren Schlichting, the group president of Dish’s Sling TV, and John Martin, the chairman and CEO of Turner, scheduled to testify.

Shortly after the Justice Department sued to block the merger, AT&T-Time Warner announced that its Turner networks were offering to go into “baseball style arbitration” with rival distributors in carriage disputes. The offer is contingent on the merger’s approval, and would last for seven years.

Fenwick testified that Cox received the offer but thought it was “a little bit of gamesmanship.”

“We viewed it as a one-sided agreement in favor of Turner.” She noted that it did not cover HBO, was too “narrowly defined” and would force Cox to take “all or nothing” offers at the whim of the arbitrator.

Petrocelli challenged her characterization of the arbitration offer, and asked her why she did not contact any Turner executives with her concerns.

“We didn’t think [the offer] was something real that we could respond to,” she said.

(Pictured: Time Warner CEO Jeff Bewkes entering courthouse on Thursday.)

More Politics

  • Donald Trump Hollywood Racism

    White House Says Trump 'Strongly Condemns' Violent Anti-Media Video

    President Donald Trump hasn’t yet watched a violent parody video in which he’s depicted killing figures representing media outlets and his political rivals, but the White House says he “strongly condemns” it. “Re: the video played over the weekend: The @POTUS @realDonaldTrump has not yet seen the video, he will see it shortly, but based [...]

  • Presidential Race Cable News Donald Trump

    CNN Calls on Trump to Denounce Video Showing Violence Against Media

    CNN has called on President Trump to denounce a video that was shown at a pro-Trump conference last week, in which the president is depicted slaughtering figures representing media outlets. The New York Times reported that the video was shown at a conference for Trump supporters held at Trump’s golf resort in Doral, Fla. According [...]

  • Charlize Theron speaks at the GEANCO

    Charlize Theron Talks 'White Privilege,' Growing Up During Apartheid in South Africa

    Charlize Theron, during an onstage discussion with her “Gringo” costar David Oyelowo about philanthropy at Thursday’s annual fundraiser for Nigerian children’s educational and health program GEANCO, said she was a beneficiary of “white privilege” while growing up in Apartheid-torn South Africa. “I obviously am a white person who benefited from my white privilege,” Theron said [...]

  • Trump-Twitch-channel

    Donald Trump Is Now on Amazon's Twitch Streaming Service

    Donald Trump has joined Twitch, the game-focused live-streaming service, apparently in an effort to widen his unfiltered 2020 reelection messaging as the embattled U.S. president faces a fast-moving impeachment inquiry. Trump’s first Twitch broadcast was from his campaign rally Thursday in Minneapolis, where among other targets he lashed out at Rep. Ilhan Omar (D-Minn.), Somali [...]

  • Amy Klobuchar, Cory Booker, Pete Buttigieg,

    MSNBC, Washington Post to Co-Host Democratic Presidential Debate in November

    MSNBC and The Washington Post are teaming up to co-host one of the Democratic Presidential debates. The debate will take place in Georgia on Nov. 20, airing on MSNBC and streaming on MSNBC.com and the Washington Post’s website. As it stands, eight candidates are set to qualify for the showdown, according to an NBC News [...]

  • Supporters of LGBTQ rights hold placards

    Supreme Court Hears Oral Arguments on LGBTQ Discrimination

    The Supreme Court heard oral arguments Tuesday on three cases that will decide whether employers can discriminate based on sexual orientation and transgender status. The plaintiffs argue that the Civil Rights Act of 1964, which bars sex discrimination, should be read to forbid discrimination against gay and transgender employees. According to reports from the courtroom, [...]

More From Our Brands

Access exclusive content