CNN (As We Know It) May Soon Cease to Exist
Lost in the video news of the day, where a CNN producer stated Russia was a "mostly bulls***" narrative, was the fact that Time Warner, the company that owns CNN, is likely going to be bought out by AT&T.
No official timetable has been made public, but if the merger goes through, and all indications say yes, CNN's days, as it's currently formatted, could be numbered.
The merger will allow AT&T to produce and distribute content across multiple media platforms. The company will receive major media assets including HBO, Turner Broadcasting, Warner Bros., CNN, and DC Comics.
A group of mostly Democratic senators has urged the Department of Justice (DOJ) to block the merger.
The group sent a letter to Attorney General Jeff Sessions, citing concerns that the combined company would gain unmatched control and distribution of popular content, resulting in higher prices, fewer choices, and poorer quality services for consumers.
The senators wrote:
"Combining these behemoths would create a mega media conglomerate with both the incentive and the ability to favor its own content over that of other entertainment companies. While the companies have suggested that the proposed deal will result in certain consumer benefits, they have thus far failed to demonstrate that these purported benefits are either merger-specific or sufficient to outweigh the substantial harms of the deal."
The potential merger adds a huge piece to the puzzle as to why CNN retracted a deeply flawed Russia story about Anthony Scaramucci, a Wall Street financier who served on Trump's transition team.
The story -- citing a single anonymous source -- said Senate investigators were examining a meeting between Scaramucci and an executive for the Russian Direct Investment Fund. The $10-billion fund makes direct investments in Russian companies.
Twenty-four hours later, the story was retracted with an apology. And the reasons why are much clearer now.
First, the story was poorly reported.
Second, Scaramucci threatened to take legal action against CNN, according to a story from the New York Post. Scaramucci reportedly hired a well-known attorney who prepared a lawsuit to the tune of $100 million.
And third, nothing should get in the way of that merger.
The three journalists responsible for the retracted story, reporter Tom Frank, editor Eric Lichtblau, and Lex Haris, who headed the CNN investigation unit, have all resigned.
Despite the current issues with the network, CNN President Jeff Zucker recently boasted that viewers trust CNN “more than ever.” Zucker is referring to an increase in viewership compared to a year ago.
A CNN producer noted in a recently published undercover video that President Trump is "good for business."
It's not clear if Zucker or the many executives at CNN will survive the proposed merger.
The AT&T execs who will decide who goes and who stays are AT&T CEO Randall Stephenson and Entertainment CEO John Stankey.
Winning approval for the transaction is essential for Stephenson’s plan to turn AT&T into a media powerhouse. One of Stephenson’s previous megamerger attempts, a 2011 deal to acquire T-Mobile, was derailed by the Obama administration.
One thing we can bank on, if the merger goes through, is that CNN will have a vastly different approach to news. Somewhere Bill O'Reilly is warming up in the bullpen.
In January, President Trump met with Stephenson to discuss the company’s proposed bid. Trump — a fierce critic of CNN — has publicly opposed the merger. But we obviously don't know what is being discussed behind closed doors.
We do know that it would be very unusual for a president to weigh in on what is an enforcement matter.
Potential antitrust concerns in this deal are typically handled by the Justice Department. The White House has typically stayed at arm’s length from the antitrust division’s merger reviews.
Even the appearance of trying to influence this type of legal matter is extremely rare.