Donald Trump smiled during a Fox News debate in August 2015. (Chip Somodevilla/Getty Images)
President Trump on Thursday congratulated Rupert Murdoch on reaching an agreement to sell 21st Century Fox's entertainment assets to Disney, through White House press secretary Sarah Huckabee Sanders, who told reporters that the president believes “this could be a great thing for jobs.”
Trump's view of another major media acquisition, AT&T's planned purchase of Time Warner, is very different.
“I've always felt that that was a deal that's not good for the country,” he said last month.
Two reasons might help account for a contrast that is otherwise hard to explain: 21st Century Fox owns Fox News, which Trump loves; Time Warner owns CNN, which Trump hates.
Vanity Fair's Gabriel Sherman reported that Trump not only spoke with Murdoch after the Disney-Fox deal was announced but also called before to make sure that the conservative media baron would not sell Fox News. Never fear, Mr. President. Murdoch is holding on to his news brands.
Such assurance might have made Trump feel better about the Disney-Fox transaction, which must be approved by federal regulators before it can close.
Meanwhile, Trump's Justice Department is suing to block the AT&T-Time Warner merger. AT&T already owns DirecTV, the satellite television service, and by purchasing Time Warner, it would acquire CNN and the rest of the Turner Broadcasting networks.
That's a violation of antitrust laws, according to the Justice Department, which made this argument in its lawsuit: “After the merger, AT&T/DirecTV would have an increased ability to charge virtual [multichannel video programming distributors] higher prices for Turner's and HBO's important and popular programming and could very well withhold that programming entirely from some virtual MVPDs, leading to even more severe effects on competition.”
Side note: Trump often claims that CNN's ratings are low, but the Justice Department says CNN is “popular” and one of the country's “top TV networks.”
Anyway, the Justice Department's objection to the AT&T-Time Warner deal isn't necessarily unfounded. Rebecca Haw Allensworth, an antitrust attorney who teaches at Vanderbilt, told me last month that “there is a sound legal argument, and it's basically the argument laid out in the Justice Department brief against this merger.”
“However,” Allensworth added, “it is the kind of argument that hasn't been made by any Republican, conservative administration ever — not even by Obama. It is a brave new perspective that is not in keeping with the people that Trump has appointed to do antitrust at the [Justice Department]. Yes, there's a good legal argument, but yes, it's also very suspicious that this is being done for the wrong reasons.”
The wrong reason being to stick it to CNN, which Trump routinely calls “fake news.”
Adding to the appearance of a vendetta is this: AT&T-Time Warner would be a “vertical” merger, while Disney-Fox would be a “horizontal” merger. Horizontal mergers typically receive more regulatory scrutiny, yet Trump is fine with Disney-Fox, even as he protests AT&T-Time Warner.
A vertical merger consolidates two companies that represent different links in a supply chain. Time Warner produces content; AT&T distributes content.
A horizontal merger brings together two of the same links. Disney and Fox are both content producers.
One example of the ramifications: In a merged company, Disney, which owns the Avengers franchise, wouldn't have to compete with Fox, which owns the X-Men franchise, to make better superhero movies, anymore. Iron Man and Wolverine would be part of the same corporate family.
That's okay by Trump. His position isn't inherently wrong; it just seems inconsistent with his stance on another major media deal.
Source : https://www.washingtonpost.com/news/the-fix/wp/2017/12/15/two-reasons-trump-loves-one-media-merger-but-hates-another-fox-news-and-cnn/