Why One Judge’s Decision Could Change the Fate of US Media

A senior judge at the U.S. District court for the District of Columbia, Richard Leon will decide on Tuesday whether to approve AT&T’s $85 billion acquisition of Time Warner, NBC News reported.

AT&T’s argument for the merger is focused on the looming threat from tech companies that have used the internet to sidestep the traditional media distribution methods of movie studios and cable systems. Media companies are now trying to stockpile the most sought-after content and develop their own internet-based distribution in hopes of attracting enough subscribers to compete with globally established tech companies.

Jonathan Knee, a senior advisor at investment bank Evercore, said the growing power of tech companies has forced media companies to start teaming up out of fear that they’ll be left behind.

If Leon sides with the Justice Department, which has challenged the deal by arguing it will be bad for consumers, media companies will have little choice but to take the decision as a signal that the government will block other major media mergers. Just as AT&T and Time Warner are trying to merge, both Disney and Comcast, owner of NBCUniversal, are pursuing 21st Century Fox. T-Mobile and Sprint are also looking to combine.

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