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AT&T's Stephenson: CNN Spinoff Doesn't Make Sense

Tells CNBC he thinks Time Warner deal will go through 1/17/2017 10:45 AM Eastern
AT&T CEO Randall Stephenson

Although AT&T and Time Warner have signaled they expect to bypass the FCC review of their proposed $108.7 billion merger, a review that would be triggered by the exchange of FCC licenses like those used to transmit CNN and HBO, AT&T chairman/CEO Randall Stephenson signaled a spinoff of CNN was not in the cards.

 

"I don't know why we'd even talk about that," he told business news network CNBC. "It doesn't seem relevant to approving a deal like this. What would be the competitive issue that you're remedying with spinning off CNN? There are not competitive issues with owning CNN."

 

President-elect Donald Trump, who has been highly critical of CNN, has threatened to block the deal, leading some to see a spinoff as a way to ease the path to approval.

 

Related: Trump Compares U.S. to Nazi Germany

 

But Stephenson said in the interview that he sees it as a "basic vertical merger" that will ultimately be approved.

 

AT&T and Time Warner signaled in their SEC filing on the deal that "Time Warner has conducted a review of all licenses that it holds that are granted by the FCC. While subject to change, it is currently anticipated that Time Warner will not need to transfer any of its FCC licenses to AT&T in order to continue to conduct its business operations after the closing of the transaction."

 

Stephenson met with Trump last week, but AT&T said they did not talk about the deal. Randall echoed that this week to CNBC, but said they did talk about the need for streamlining regulation and the impact regulation had on his company.

 

MCN reported over the weekend that the Trump Administration has embraced a deregulatory FCC plan.

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