Michael de la Merced

Disney’s offer to buy 21st Century Fox. CVS’s bid for Aetna. T-Mobile’s proposed merger with Sprint. The path for these blockbuster deals and others could be transformed in an instant on June 12, when a federal judge is expected to issue his opinion on the government’s effort to block AT&T’s merger with Time Warner. It is one of the most influential antitrust cases in decades, enthralling Hollywood, Silicon Valley and Madison Avenue. If the merger is blocked, some executives are likely to slim down their deal aspirations.

Britain’s culture secretary said that 21st Century Fox should be allowed to bid for control of the satellite broadcaster Sky -- as long as Fox sells 24-hour news channel Sky News. The news from Britain sets up a potential bidding war with Comcast for a jewel of Europe’s media industry. The decision by the culture secretary, Matt Hancock, ends months of uncertainty over whether the British government would block Rupert Murdoch’s efforts to buy the 61 percent of Sky that his company does not already own.

Here’s what three government agencies will weigh as they consider the T-Mobile/Sprint merger.

“The [Federal Communications Commission] has basically said: ‘Game on. We’re going to let you consolidate further than anyone had imagined,’” said Richard Greenfield, a media analyst at BTIG.

Consolidation of local broadcast stations could lead to more expensive fees for consumers as providers pass on ever-higher fees from broadcasters and content creators to subscribers. But to media companies, the mantra of late has been that bigger is better. For broadcast station companies in particular — including Sinclair, Fox and the Nexstar Media Group — owning more stations increases their power over cable companies, which pay to retransmit the stations. Fox’s motive for pursuing Tribune, which has more Fox affiliates than any other station owner, largely appears to be blocking a deal with Sinclair. It plans to form a joint venture with the Blackstone Group, an investment giant, in which Blackstone would provide the cash for a deal while Fox would provide its own television stations. If successful, Fox would then reduce its direct exposure to local television stations, while still holding on to a piece — and while stymieing a rival.

Over three decades ago, such was AT&T’s monopoly over the nation’s communications networks that the government forcefully shattered its empire. Now, as one of its successors again seeks a formidable business empire by buying Time Warner, lawmakers, analysts and advocacy groups are closely watching to see if the union, or any that follow in its wake, poses harm to consumers.

Reaction to AT&T’s $85.4 billion purchase was swift — and, outside of Wall Street, full of skepticism. Much of the concern was rooted in how consumers have fared since Comcast bought NBCUniversal, a deal that provided a template for the consolidation of media and telecommunications. The top Republican and Democrat on the Senate Judiciary Committee’s antitrust subcommittee said they planned to hold a hearing on the deal. And even competitors like Disney quickly chimed in, urging regulators to pay close attention in their review. At issue is whether AT&T, with over 100 million subscribers across its wireless, broadband and DirecTV offerings, will somehow favor its own customers when it comes to HBO, CNN and Warner Bros. properties like the Batman and Harry Potter franchises. Some consumer rights advocates also questioned how AT&T will use the viewership data that it gathers from its subscribers, particularly if the Time Warner acquisition drives more consumers to AT&T’s services.

AT&T has bought one of the remaining crown jewels of the entertainment industry, agreeing to buy Time Warner, the home of HBO and CNN, for about $85.4 billion. The deal will create a new colossus capable of both producing content and distributing it to millions with wireless phones, broadband subscriptions and satellite TV connections. The proposed deal is likely to spur yet more consolidation among media companies, which have already looked to partners to get bigger. Time Warner’s deal with AT&T is likely to face tough scrutiny from government regulators increasingly skeptical of power being consolidated among a few titans. Donald J. Trump, the Republican nominee for president, indicated that he would seek to block the merger if elected “because it’s too much concentration of power in the hands of too few.”
AT&T-Time Warner deal could spur more mergers, scrutiny

Yahoo’s board has agreed to sell the company’s core internet operations and land holdings to Verizon Communications for $4.8 billion.

After the sale, Yahoo shareholders will be left with about $41 billion in investments in the Chinese e-commerce company Alibaba, as well as Yahoo Japan and a small portfolio of patents. That compares with Yahoo’s peak value of more than $125 billion, reached in January 2000. Marissa Mayer, Yahoo’s chief executive, is not expected to join Verizon, but she is due to receive a severance payout worth about $57 million, according to Equilar, a compensation research firm.

For Verizon, the deal simply adds another piece to the digital media and advertising business it is trying to build. Verizon is building a portfolio of online content and aiming to monetize it via advertising. Its current assets include Huffington Post and TechCrunch, which it acquired in last year’s AOL deal, and its own mobile video app, called go90. Acquiring Yahoo will bring in millions more viewers from Yahoo sites like Finance, Sports and News. Verizon also hopes to plug data derived from smartphones into AOL, and now Yahoo’s, digital advertising systems, and it is aiming to build a competitor to online advertising giants Facebook and Google. But a combined Yahoo and AOL would be far outpaced by its now far-larger rivals.

The companies said the deal is subject to customary closing conditions, including approval by Yahoo’s shareholders, and is expected to close in early 2017. Until the closing, the companies said, Yahoo will continue to operate independently.

[Commentary] Few industries have been as deeply embroiled in merger mania as the telecommunications industry, particularly after AT&T’s $48.5 billion bid for DirecTV. Now, with another mega-deal in the works, how will others respond?

Perhaps with even more consolidation. AT&T‘s acquisition most clearly affects the country’s other major satellite television provider, Dish. Dish Chairman Charles Ergen has made no secret that deals were an important part of his strategy, whether they be a foiled attempt at buying Sprint or a withdrawn bid to acquire the bankrupt broadband wireless provider LightSquared. And in recent months, news reports contended that Ergen was interested in pursuing deals either for T-Mobile USA or DirecTV.

At the same time, analysts had long speculated that Dish might make an attractive acquisition target for AT&T. A bigger and more emboldened AT&T may also have repercussions for Sprint, whose majority owner, the Japanese telecom Softbank, has long coveted a deal with T-Mobile to gain much-needed scale.

Yet a tie-up of the two has already drawn hints of vocal opposition from several officials at the Federal Communications Commission, who have worried that a merger of the two would constitute an unacceptable level of consolidation.

Sprint and SoftBank have argued not so subtly that acquiring T-Mobile would create more competition in the wireless industry, blunting the power of Verizon and AT&T.