AT&T wins. Comcast shares slump on decision

AT&T wins. Comcast shares slump on decision

Cable giant Comcast has launched a hostile bid for 21st Century Fox, the media empire controlled by Rupert Murdoch.

Many Marvel fans have been waiting on edge after the Walt Disney Company announced they were in the process of acquiring 20th Century Fox and other entertainment assets from the Murdoch family's vast media empire.

A high-stakes decision in a USA court Tuesday will be significant for the future of Big Media, Big Tech and big business in general.

Leon - who presided over the Justice Department's suit against Comcast's acquisition of NBCUniversal that was settled with a consent decree - signaled his time table to announce his decision on AT&T for Tuesday at 4 p.m., giving the company and the Justice Department time to settle the case.

Comcast Corp (CMCSA.O) offered $65 billion on Wednesday to lure Twenty-First Century Fox Inc (FOXA.O) away from a merger with Walt Disney Co (DIS.N), setting up a bidding war between two of the largest US media companies with its 20 percent higher offer. But AT&T and Time Warner are in different but complementary businesses.

The judge in a scathing opinion urged the USA government not to seek a stay of his ruling, saying it would be "manifestly unjust" to do so and not likely to succeed.

Comcast is expected to lead a wave of traditional media companies trying to combine distribution and production to compete with Netflix Inc (NFLX.O) and Alphabet Inc's (GOOGL.O) Google.

"We continue to believe that the pay-TV market will be less competitive and less innovative as a result of the proposed merger between AT&T and Time Warner", said Assistant Attorney General Makan Delrahim.

All of those deals would unite companies in different parts of an industry's supply chain. AT&T and Time Warner argue they're simply trying to stay afloat in the new streaming environment. Fox stock jumped more than 6% in after-hours trading following the ruling.

The deal is what is known as a vertically integrated merger: a joining of two companies that do not directly compete with each other.

The mega-merger is a high-stakes bet by AT&T Inc. on the synergy between companies that produce news and entertainment and those that funnel it to consumers.

If AT&T is successful in its bid to buy Time Warner, it will nearly certainly find itself competing in a media market dominated by other large, integrated providers.

Before the trial started, AT&T lawyers said the Time Warner deal may have been singled out for government enforcement but Judge Leon of the U.S. District Court for the District of Columbia rejected their bid to force the disclosure of White House communications that might have shed light on the matter.

Those comments and his repeated criticism of CNN, which is owned by Time Warner's unit Turner Broadcasting, raised speculation that Trump had pushed Delrahim and the Justice Department to block the deal. That was "a deal we will not approve in my administration".

"One can not ignore the fact that there's less independent content to go around", after the AT&T deal, said Henry Su, an antitrust expert with Constantine Cannon LLP. The government alleged that by owning Time Warner, AT&T would have too much leverage in negotiations with television distributors, which would hurt competitors, harm innovation and could lead to increased cable prices for consumers.